What May Hinder Nigeria’s Plan To Trigger Gas Revolution – Renaissance Capital’s Robertson

Charlie Robertson, the global chief economist of Renaissance Capital, has identified two obstacles that may hinder Nigeria’s efforts to trigger a gas revolution.

Robertson told THE WHISTLER in an interview that Nigeria’s enormous gas potential will be beneficial if the country can fix foreign exchange problems and the ongoing security issues.

“If Nigeria freed up the FX market it would help encourage investment in LNG, and ensuring security is very important too,” he told our correspondent.

Nigeria’s foreign exchange problems have stifled foreign investments in different sectors of the Nigerian economy.

The country is also faced with a huge insecurity problem as national infrastructures are being attacked.

Oil and gas facilities have over the years been under attacks by vandals in the oil rich Niger Delta region. In the first nine months of 2021 alone, Nigeria lost N898bn ($2.15bn) to pipeline vandalism.

Experts believe that vandalism is a potential threat to Nigeria’s gas projects.

Meanwhile, Robertson believes that with the ongoing Russia-Ukraine war and its attendant energy crisis, Nigeria and other African countries stand a chance to replace Russia as energy suppliers to Europe.

“Is there an opportunity to replace Russia as an energy supplier to Europe? Yes, in the long-term – as per this report we put today. Short-term beneficiaries are Algeria, Egypt and Nigeria. Long-term, Mauritania/Senegal, Tanzania, Mozambique,” he had said in a tweet.

World leaders during the COP26 held in Glasgow in 2021 signed the Glasgow Climate Pact and agreed to the Paris Rulebook.

Cop26’s goal was to secure global net zero by 2050 and keep a maximum of 1.5 C degrees of warming.

But for Nigeria which opted for 2060 as the year to go net zero, gas will become its transition fuel, according to the Nigerian National Petroleum Company Ltd.

With the invasion of Ukraine by Russia, the United States and its allies are slashing their dependence on Russian energy.

Europe is cutting Russian gas imports by 80 per cent by the end of 2022.

According to Renaissance Capital, there will be a 200-300Million Metric Tonnes per Annum (mmtpa) LNG supply deficit by 2040, which could present an opportunity for African gas to step in.

The investment bank also projects that by 2035, Africa’s LNG output will rise to 125-165bcm, or 92-121mmtpa of LNG.

In 2020, Africa’s LNG output was 56.4bcm or 41mmtpa. By 2040, the figures would rise to 200bcm.

Nigeria has Africa’s biggest gas deposit of over 200trn cubic feet and had declared a decade of gas in 2020.

The Federal Government is planning to connect gas pipelines to Europe to tap from the global gas market, according to Mele Kyari, the Chief Executive Officer of the NNPC Ltd.