Fall in global oil price: Gas forum to the rescue

The on-going crisis in the global oil price has left many looking for a viable replacement to fossil fuel as source of revenue. In this piece, MUSA ADAMU looks at the imperative of Nigeria’s delegation to the gas exporting countries forum holding in Iran.  

A high powered Nigeria delegation headed by President Muhammadu Buhari returned to the country yesterday after attending the 3rd Gas Exporting Countries’ Forum (GECF) held in Tehran, capital of the Islamic Republic of Iran.
The composition of the delegation only served to buttress the near desperate situation Nigeria finds itself in the face of on-going free fall of crude oil price in the global market.

The delegation, which had not less than three ministers, included the minister of state for petroleum resources, Ibe Kachikwu, minister of power, works & housing, Babatunde Fashola and minister of foreign affairs, Geoffrey Onyeama.
According to Femi Adeshina, senior special assistant on media to the President, the member countries reviewed the current market outlook on gas and discuss strategies for boosting gas production during their meeting in Tehran.
Nigeria and other GECF members currently account for 42 percent of global gas production, 70 percent of global gas reserves, 40 percent of pipeline transmission of gas and 65 percent of the global trade in Liquefied Natural Gas (LNG).
Underscoring Nigeria’s seriousness on diversification, President Buhari informed the forum that Nigeria was taking appropriate steps to turn its abundant gas resources into veritable catalyst for development as the nation’s gas potential might be in excess of 600 trillion cubic feet.
Buhari said the country was taking the steps because natural gas was fast evolving as the fuel of choice for sustainable development in view of its impressive suitability for environmental protection and lower cost of supply in comparison with fossil fuels.
Asking for assurance that Nigeria’s efforts would be rewarded, Buhari charged the leadership of the GECF to take appropriate steps towards sustaining the pricing of gas at the international market for the benefit of member countries.
While Nigeria is the 12th largest producer of petroleum in the world, it also possesses the largest natural gas reserves in the continent of Africa.
The natural gas reserves of the country are well over 5 trillion m³ and are several times as substantial as the crude oil reserves.

The biggest natural gas operator is the Nigerian Liquefied Natural Gas Company which began exploration and production in 1999.
Although, Nigeria is better placed as a gas producing nation in Africa, over the years this subsector of the economy has not been given the needed attention by the country the way crude production and sale has enjoyed.
Due to unsustainable exploitation practices coupled with the lack of gas utilization infrastructures, Nigeria flares a substantial proportion of the gas it produces and the country lags far behind when compared to other oil producing nations in terms of associated gas conservation and utilization.
Currently, however, a lot of effort is made to make use of the abundant reserves of associated gas and avoid flaring, as many Nigerian oil fields are saturated, and have primary gas caps.

According to the website of the Gas Exporting Countries Forum (GECF), the forum is an international governmental organization which provides the framework for exchanging experience and information among member countries.
“GECF is a gathering of the world’s leading gas producers and was set up as international governmental organization with the objective to increase the level of coordination and strengthen the collaboration among member countries.
“GECF also seeks to build a mechanism for a more meaningful dialogue between gas producers and gas consumers for the sake of stability and security of supply and demand in global natural gas markets.

“In accordance with the GECF statute, the organization is aiming to support the sovereign rights of its members over their natural gas resources and their abilities to develop, preserve and use such resources for the benefit of their peoples, through the exchange of experience, views, information and coordination in gas-related matters.”
The forum membership is currently made up of Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, United Arab Emirates and Venezuela, while Iraq, Kazakhstan, the Netherlands, Norway, Oman and Peru have the status of observer members.

With the current number of members the GECF has a strong position on the world gas market and among international energy organizations, its potential rests on the enormous natural gas reserves of the member countries all together accumulating 67% of the world proven natural gas reserves.
Industry experts have contended that with the new government looking for a way to redeem its campaign promises to the electorates and faced with the dwindling international oil price, this meeting could not have come at a better time.
Indeed, they further contend that the forum is a viable way out to Nigeria and its gas producing partners, since OPEC has been rendered weightless by the United States with the active and willing connivance of the Kingdom of Saudi Arabia.

They argued further that since almost all the countries on the continent of Africa have found oil deposit and more are still working to find, it is only reasonable for Nigeria to focus its attention on the area its has a comparative advantage over others.
According to them, if Nigeria finally decides to give the sector the attention it deserves, it would not only have weaned itself from been vulnerable to the  international oil price, but would have taken a far reaching step in solving the question of environmental concern in the Niger delta and the world in general.
They urged the federal government to go further by attracting investors into the sector in order to complete the long delay ‘Train 7’ project of the Nigerian Liquefied Natural Gas (NLNG).

According to a recent media report credited to the members of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Nigeria may be on the verge of losing about $10 billion Foreign Direct Investment (FDI) due to the delay in the implementation of this project.
The report said: “The workers, who were apparently worried about the unnecessary delay of the project, said that the completion of the Train 7 project will also enable Nigeria to end gas flare by harnessing the flared gas for domestic use and for export, and adequately position the company and Nigeria in the competitive global gas market.”