Power Sector Retreat Presentations - Jan 20-21 2012 - NNPC Gas

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Power Sector Retreat Presentations - Jan 20-21 2012 - NNPC Gas

Text of Power Sector Retreat Presentations - Jan 20-21 2012 - NNPC Gas

  • Gas Infrastructure and Supply

    January 20, 2012

    Dr. David Ige Group Executive Director, Gas & Power

    Nigerian National Petroleum Corporation

  • Gas Strategy and Anchor Sectors

    GAS TO POWER By 2014, we would have positioned Nigeria firmly as the undisputed regional hub for gas-based industries such as fertilizer, petrochemicals and methanol.

    GAS BASED INDUSTRIALISATION HIGH VALUE EXPORT

    STRATEGIC FRAMEWORK FOR NIGERIAN GAS

    Consolidate Nigerias position and market share in high value export markets Targeted LNG export opportunities Regional gas pipelines that help

    consolidate nations footprint and influence

    Deliver on Presidents Gas Revolution Agenda to: Position Nigeria as the regional hub

    for gas-based industries such as fertilizer, petrochemical and methanol

    Transform gas sector to value adding sector

    Significantly increase gas supply to the Power Sector

    Focused delivery plan to support existing and ongoing power plants by PHCN and NIPP

    Deliver Gas for at least 12GW by 2015

    LNG Regional Pipelines

    2

  • Gas Consumption and Demand Forecast

    Based on the forecast growth in domestic gas demand, we foresee opportunities in transmission and marketing

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    Year

    Nigerias Historical and Projected Gas Demand

    Power LDC GBI WAGP3

  • Gas Availability - Sources of Gas in Domestic Market

    FGN Mandated Domestic Supply Obligations (DSO)

    Direct Bilateral Arrangement between Suppliers and

    Buyers Unutilized Gas Flares

    Most significant short/medium term

    planned source of gas

    Allocation of available gas from

    DSO sources managed by GACN

    3 Sources of Gas in Nigeria

    Gas from suppliers over and above their

    respective DSO

    Managed bilaterally on a willing buyer,

    willing seller basis i.e. negotiated terms

    Limited volume in the short term,

    particularly from IOCs.

    Small flared gas for which no plan exists

    to utilize but 3rd party players may

    propose utilization plans

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  • Domestic Supply Obligation Western Area Supply Projects

    3

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    1

    1 Dry Gas 2 Existing Wet Gas 3 Ongoing Projects - Wet Gas 4 FID Acceleration - Wet Gas

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    5 Gas from East 5

  • Domestic Supply Obligation Eastern Area Supply Projects

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  • Analysis of Stranded Gas in the East

    A significant amount of gas is stranded currently in the East mainly due to infrastructure and the delays in NIPP power plants

    7

  • Koko Port

    Bonny LNG

    Escravos

    Ob/Ob

    Oben

    Utorogu

    Egbin

    Olorunshogo Omotosho

    Ihovbor

    Geregu

    Afam

    Delta IV

    Abuja

    Kaduna

    Calabar

    Map showing critical Infrastructures

    8

    Sapele

  • Western Network Pipeline System

    ELPS A Escravos to Warri expansion

    from 300mmcf/d to 600mmcf/d Will allow immediate addition

    of 80mmcf/d from Escravos Due end 2011

    Looping ELPS C Doubling capacity to 2bcf/d from

    Warri to lagos Due August 2012 Pipes expected in October

    Olorunshogo Permanent Line 24permanent line to Olorunshogo. Recent contract approval by Mr. P and

    contractor being mobilized. Due Apr 2012

    Will address pressure problem at Olorunsogo

    9

  • QIT

    Bonny NLNG

    Uquo

    Alscon

    Ibom Power

    Calabar NIPP

    Unicem Cement

    Imo River

    Obigbo

    Alaoji NIPP

    Aba Industries

    Notore

    Indorama

    Obiafu/Obrikom

    Obite Ubeta

    Rumuji

    Alakiri GTS 1

    Cawthorne Channel

    Escravos

    Oben

    Geregu NIPP

    Ajaokuta

    ELPS 1

    ELPS 2

    Egbin

    Olorunshogo

    Omotosho

    Koko Gas Industrial Park

    Ibadan

    Jebba

    OUR

    Oso

    Existing Gas Source

    Existing Pipeline System

    Ongoing/Planned Pipeline system

    Legend

    Power Plant

    Industries

  • Ongoing Pipeline Projects ELPS Phase 1

    11

    Horizontal Directional Drilling Operation across Warri Benin Express way

    Lowering of welded line pipes at NGC Right of Way through Jesse, Delta State

    Welding activities for Ethiope River Crossing

  • Ongoing Pipeline Projects Alaoji, Olorunshogo

    12

    Pipe stacked on Site

    Offloading pipe on site

    ROW Clearing

  • Roadmap to Securing Alternative Funding for Pipelines

    Assess Pipeline Tariff Review Tariff Affordability Review revenue

    securitisation Source for Investors

    Secure Financial Closure

    Assessment of pipeline tariff required to make 3rd party financing viable this study now completed by NNPC

    Engagement of stakeholders (e.g. NERC) on affordability of tariff and implication for medium-term MYTO

    Checking of possible tariff revenue securitisation to make 3rd party financing bankable

    Road show to attract investors / financiers, selection of willing financiers/investors

    Investors secure financial closure

    Description

    Sept 2011 Dec 2012 Jun 2012 Jan 2012 Dec 2011

    13

  • Gas to Power Supply Outlook

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  • New Gas Sources of Gas to Bridge Gap New sources of gas, hitherto not considered for domestic market e.g. bringing offshore PSC gas to shore, are being evaluated. This could add 400-500 mmscf/d by 2016/17

    Koko

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    Erha Bosi - Development of offshore processing plant with offshore pipeline to transport about 400mmscfd of gas currently being re-injected to the western CPF in Koko.

    CAMAC Oyo Field Development Following options are being looked to monetized the currently re-injected 100-200mmscfd gas in Oyo field :

    a. Offshore pipeline from Oyo to the western CPF in Koko

    b. Offshore pipeline to ELPS via Chevron Okan gas processing plant

    c. Offshore pipeline to OGGS

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  • Conclusion

    We have an enabling policy framework is in place to support critical mass of gas supply development for the power sector

    Very good progress being made in development of a robust gas grid that will enable rapid growth of supply from diverse sources increasing the liquidity of supply

    Medium term outlook is promising and power sector investors can be assured of supply

    16

  • APPENDIX

    17

  • Changing Power Demand

    18

  • Overview of the Nigerian Gas Industry Gas Resource Base

    1,680

    1,046

    899

    265 263 245 199 187 176 159

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    et

    Proven Natural Gas Reserves, 2010

    Source: EU Energy Portal; Transparency International, 2011 Report on Oil and Gas Companies

    Nigeria has a huge economic potential trapped in this vast natural gas resource

    600TCF Undiscovered Potential

    19

  • Enabling Sector Policy Stimulating Supply

    To support the agenda, a set of enabling policies were approved by His Excellency, Dr. Goodluck Jonathan. These are being rolled out and have created a major boost and jumpstart for the sectors agenda

    Scalable Gas Infrastructure

    Blueprint

    20

  • Strategy Aggregator Company: Gas Aggregation Company Nigeria (GACN)

    Gas Aggregation Company Nigeria (GACN) Contact Details: Office: #1B Malcolm Fraser

    Street, Asokoro, Abuja Telephone: 098759045

    Email: [email protected]

    GACN was established to manage the Domestic Supply Obligations Facilitate gas access and aggregation of gas pricing

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  • Status of Major Infrastructure Projects

    22

  • Eastern Network Pipeline System Completion of the NOPL pipeline in 2012 will unlock stranded gas from MPN (100mmcf/d); NAOC Ebocha (50mmcf/d) and TEPNG (60mmcf/d), bringing them to Obigbo Node hub from where Alaoji and other Eastern Power plants can be supplied

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  • Eastern Network Pipeline System

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  • Our efforts in Power are focused on meeting a projected 3.5 bcf/d of gas demand by over 30 existing and proposed power plants.

    Gas to Power

    PHCN 818 mmscfd

    1

    NIPP 1,297 mmscfd

    2

    JV IPP 322 mmscfd

    3

    3rd Party IPP 531 mmscfd

    4

    Egbin + AES Delta IV Sapele Olorunshogo Omotosho

    Geregu Afam I-V

    Olorunshogo Sapele Geregu Omotosho Ihovbor

    Egbema Gbaran Omoku Alaoji Calabar

    Chevron Agura NAOC, Okpai Total, Obite Shell, Afam VI ExxonMobil, QIT

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    Q4 2011 2012 2013 2014 2015

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    scfd

    Power Sector Gas Demand PHCN NIPP JV IPP 3rd Party IPP

    Numerous 3rd party IPP in consultation with the Bulk Trader

    25

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