ND Western intends to grow gas production in Nigeria

Eberechukwu Oji, Managing Director & Chief Executive Officer, ND Western spoke exclusively to Julian Walker in the lead up to NOG Energy Week 2023, about his outlook for Nigeria's energy sector and where the company is looking to expand in Africa in the future

What is your outlook for Nigeria's energy sector?

Nigeria is a resource-rich country with substantial oil and natural gas reserves. However, the country's energy sector has faced significant challenges over the years, including inadequate investment in infrastructure, maintenance and regulatory issues. The Petroleum Industry Act that came into effect in August 2020 paves the way for reforms that will contribute positively to the energy sector.

One of the primary challenges facing the Nigerian energy sector is the lack of reliable power supply. The country's power infrastructure is outdated and in need of modernisation and expansion. Electricity generation is primarily from gas-fired power plants, which are often unreliable due to insufficient gas supply, poor infrastructure, and inadequate maintenance. Companies like ND Western will large natural gas resource are gearing up to ensure grow its gas delivery from 350 MMscf/d to 1bcf/d by end of the decade

The privatisation of the power sector has led to increased private sector participation in power generation and distribution, which is expected to improve the reliability of the power supply. However, the privatisation process has been slow, and many challenges remain.

Regional Energy Cooperation: Nigeria is actively engaged in regional energy cooperation initiatives such as the West African Power Pool (WAPP) and the African Continental Free Trade Area (AfCFTA). These collaborations aim to enhance regional energy integration, electricity trade, and cross-border infrastructure development, contributing to regional energy security and economic integration.

In addition, there is a growing focus on renewable energy in Nigeria. The Nigerian government has set a target to generate 30% of the country's electricity from renewable sources by 2030. This has led to increased investment in solar and wind power projects, as well as the establishment of a feed-in tariff scheme to incentivize renewable energy development.

It is important to note that the energy sector is influenced by various factors, including economic conditions, policy changes, technological advancements, and global energy trends. Nigeria's energy outlook will depend on how effectively these challenges and opportunities are addressed through sound policies, investments, and collaboration with various stakeholders.

What is ND Western doing to help support and grow Nigeria's energy sector?

NDW asset OML34 is rich in natural gas. In our strategic business plan, we aim to grow gas production from its current levels at 350mmscfd and grow to ca 1bcf/d at the end of the decade. We currently deliver about 90% of our asset produced gas into the domestic market through the ELPS with about 60% supplied to the Genco’s, while 40-43% is supplied to other commercial gas offtakers (e.g Dangote Fertilizer, BetaGlass etc..) and 10-12% goes to some of our West African neighbors through the WAGP.

We are currently embarking on drilling campaigns to open up more oil and gas wells which would help the country’s production to meet our OPEC Quota and add more gas to the domestic market.

Furthermore, to build the skilled capacity that will grow Nigeria’s energy potential going into the future, we also plan to commission the NDW-Intensive Training Programme in September 2023. The training facility was regarded as SITP (Shell Intensive Training Program) some 2-3 decades ago, where some of us who are in Executive positions in the industry passed through to become well-seasoned professionals. Our vision is to re-skill, upskill existing personnel in our industry and train new graduates to breed a sustainable human development pathway Nigeria’s energy industry.

Where is ND Western looking to expand in Africa?

ND Western is 10 years young! … We have developed strategic plans that are largely Nigeria-centric for now. There is so much untapped potential in Nigeria that we need to leverage on over the next 5 to 10 years in our business plan; That is not to say that evolving events cannot modify the trajectory of ND Western strategy, but we remain focused on Nigeria for now.

We have examined the Africa landscape recently and we continue to do so looking out for opportunities for collaboration. ND Western is not averse to collaborative development that will bring about the emancipation of the African continent.

ND Western is already playing a very fundamental role delivering 10 to 12% of her produced gas to some West African countries, namely, Togo, Benin & Ghana. Although no registered official presence can be found in those countries, but with unfolding events, nothing is impossible.

Are policymakers making Africa’s oil and gas sector more competitive and attractive for regional and global capital?

As much as Nigeria would like to remain the beautiful bride to the western or eastern block in the globe for oil production, there are still competitors that hold large resource base deposits also sourcing for funding for fossil fuel-related investments. These funds as we know have continued to dry up, but we must also remember that Africa contributes only 4% of the global greenhouse gas emissions. The COP21 Paris participants recognize that development must not be stifled in Africa due to the commitments made there.

Bloomberg forecast, a credible source for energy mix in the next 20 years, still predicts that fossil fuels will remain a large chunk of the energy mix until 2050 (see chart below). Transition will be gradual and take some time to switch as studied.

How important is collaboration in tackling Africa's energy needs?

Collaboration has always been important to address Africa’s Energy needs and historically some of the points below can speak to that;

1. Resources sharing; such as share resources, knowledge, expertise, best practices, and technological advancements in energy production
2. Investment & Funding
3. Technology Transfer and Capacity building
4. Collaborative regional Policy alignment
5. Sustainable development to achieve the SDG’s, such as access to reliable, affordable, and clean energy is crucial for economic growth, poverty reduction, healthcare, education, and other social development aspects.

NDW already plays a part in the supply of gas for the energy needs in west Africa. Through the WAGP project, gas delivered to the west coast ensures at least 50% of the power requirements in Togo, Benin and especially Ghana. The phase 2 of the projects seeks to extend the reach towards Cote de’Ivoire and neighboring countries.

The gas supply arrangements to some West African Countries through the West African Gas Pipeline spanning 30”x57km onshore and 20”x560 km offshore couldn’t have been possible without the collaborative efforts of Chevron Nigeria Limited, NNPC, SPDC OML34 (taken over by NDW since 2012); These companies represent the collective gas suppliers in the WAGP value chain. 

Also, collaboration is the core of NDW existence. An SPV ND Western formed by Four (4) highly experienced companies in our industry targeted at improving the energy needs of power and industries in Nigeria, in partnership with FHN, and First Hydrocarbon formed a consortium called “OPTIMERA” and signed a Gas Infrastructure Development Agreement (GIDA) with Lagos Free Zone (LFZ) in 2022 venturing into the midstream and downstream space of the value chain to supply gas to industries in the zone with an initial supply of 5mmscfd and gradually boost production 20mmscfd by 2026.

Finally, other collaborative efforts include power export within Africa; There are several countries that participate in regional power pools for electricity trade. There are essentially 3 power pools that currently operate within Africa such as the Southern African Power Pool (SAPP), West African Power Pool (WAPP), and East African Power Pool (EAPP); all these power pools service over 12 African nations.

Why is NOG so important for Africa energy industry?

The Nigerian Oil & Gas Conference has been vital to Africa’s Energy Industry by providing the platform for Nigeria to showcase her Technical and Operational capacity for other African Countries who are still quite young in the industry compared to ours and create partnerships for further growth amongst the IOC’s, NOC’s and Indigenous Energy Companies in Africa.

We at ND Western continue to support the effort at NOG (sponsoring key events) and its promoters as this is an effort that cannot be undermined for energy growth in Africa.

Click here to register and attend NOG Energy Week 2023, which runs from 9th - 13th of July at the International Conference Centre (ICC), Abuja.