Enhancing the Role of Natural Gas In Sustainable Development Group - - PowerPoint PPT Presentation

Enhancing the Role of Natural Gas In Sustainable Development

27th November 2019 2nd GECF International Gas Seminar Malabo, Equatorial Guinea

Group Managing Director, NNPC Mallam Mele K. Kyari

Table of Content

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Setting the Context The energy spectrum and the disparity Re-energizing the African economy using the appropriate energy sources The Nigerian Case Study Concluding remarks

Setting the Context – Sustainable development framework

Sustainable development entails harmonious co-existence between the 3 pillars to achieve sustainability This is according to many international documents e.g. UN 2030 Agenda for Sustainable Development, Paris Climate accord, etc. From energy perspective, this is achievable via the use of reliable energy sources such as natural gas and their responsible exploitation to enhance socio-economic development while protecting the environment and the ecosystem

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Economic

GDP growth; stable and resilient systems

Environment

Emission mitigation, climate change, Mgt of biodiversity, etc.

Social

Food/water security, poverty eradication, equal

• pportunity etc.

Sustainability

Domestic/intra-regional trade 2.93 Tcm, ~76%

Power, heating, etc. Re-injection Own use, etc.

Export/trade 0.94 Tcm, ~24%

0.43 Tcm, 46% 0.51 Tcm, 54%

Resources and Reserves

Production ~3.9 Tcm

Remaining technical resources:796 Tcm Proven Reserves: 197 Tcm LNG Inter-regional Pipeline

Data: Wood Mackenzie, BP, IEA

Setting the Context – Growing dynamism in the natural gas sector

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Growing gas production and supply underpinned by rising shale/tight oil/gas production and trade (LNG and pipeline gas) Technologies such as F-LNG helped in unlocking gas resources, etc. Impressive production performance from existing LNG plants and production ramp up from the new projects in US, Russia & Australia Cyclicity in LNG market conditions creating opportunities with ~ 63 MT of LNG projects FID taken in 2019 (up to Q3) More FIDs expected including our N-LNG T7 before the year ends to ensure enough supply to meet the projected rise in LNG demand around 2024 driven by Asia

Why Natural Gas? It has the credentials in support of SDGs

Clean & environmetally friendly

Vast Resources Versatile Flexible Natural Gas Affordable

Direct source of energy (e.g. power generation), feedstock to gas-based industries and its derivative such as LPG use for clean cooking The resources can last for > 2 centuries at current production levels (~3.9 Tcm) depending

• n technology, prices and policy

Piped, liquefied, compressed, sequestered/stored and a sustainable complement to other fuels such as renewables Able to compete internationally with other fuels without subsidies and its environment premium appropriately considered Emits fewer emissions when burnt (e.g. N.G. emits 117 lb of CO2 per mmBtu of energy vs 206-229 lb CO2 per mmBtu for coal); no/low pollutants e.g. NOx, etc.

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The Energy Spectrum and the disparity (1/2)

Data: BP , WB, IEA, Climate Action Tracker

This energy growth and CO2 emissions based on the current energy configuration could impact sustainability

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Growing energy consumption due to fairly strong economy, population growth and weather conditions è ~ 3% y-o-y growth in 2018 surpassing the last 10-yr CAGR of 1.7%; The share of natural gas in the global primary energy mix is growing while that of coal declining, but still coal has 27% share in 2018, ahead of all primary fuels except oil Marked energy consumption in Asia Pacific, but with 48% of its primary energy consumption from coal CO2 emissions is high Despite its large population and resources, Africa has the lowest energy consumption by region (15 GJ/cap) compared to the global average of 76 GJ/cap in 2018

Data:: BP (June 2019), IEA

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Surging electricity generation, at +3.7% y-o-y in 2018 with generation from coal leading at 38% share and associated 10 Gtons CO2 emission from burning coal Despite the growth in electricity generation, ~1 billion people are without electricity access and 2.7 billion use primitive forms of lighting and cooking facilities Africa has ~ 600 million people without electricity access mostly in the rural areas with access rates as low as below 20%

Source: Geosciences News and Information

… is Africa the darkest Continent?

The Energy Spectrum and the disparity (2/2)

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Access to Electricity by African Countries

§ In Africa, electricity access rates range from below 20% in Liberia, South Sudan, Niger & DR Congo to more that 50% in Senegal, Botswana and above 75% in South Africa, Algeria, Egypt and Morocco. § More than 90million people in Nigeria (55% of population) do not have access to grid electricity § This has resulted in an unprecedented power demand growth in West and Central Africa. This is a huge opportunity for Investment

Source : IEA

Focus areas to improve Africa’s economy using the appropriate fuels

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Gas and Power

q Develop and integrate gas and power infrastructure networks (increase interconnectivity) q Stimulate gas demand (power generation, feedstock, transport, etc.) q Set up regional gas trading hubs (transparent & market driven prices)

Regional/sub regional cooperation

q Sufficient planning to provide adequate energy infrastructure in tandem with the expanding population growth and economic activities q Collaboration amongst regional and international

• rganizations on key sectors such as energy

q Develop energy related policies and investment packages to attract FDI q Promote transparency and accountability and performance excellence (TAPE)

Expand natural gas resource exploitation

q Capitalize on the experience of key players in the region to grow production efficiently q Technology acquisition and project financing across the value chain q Explore frontier locations for more oil & gas discoveries

Power supply

q Integration of the domestic/regional power pools to improve access across the continent (baseload supply) q Utilize native energy sources to serve remote population not reachable via on-grid power supply economically (small hydro, off- grid/mini-grid, home solar solutions, etc.) q Use natural gas to increase the uptake of renewables due to their intermittency

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Contributing to Africa’s Industrialization

WAGP

West African Gas Pipeline (WAGP)

Our initiatives….

Nigeria – Morocco Gas Pipeline When the enormous Natural Gas Reserves in Nigeria is efficiently harnessed, it would enable accelerated electrification across the region in order to meet the substantial energy deficit and also increase our fertilizer production significantly thereby boosting the productivity of the agricultural sector.

….And a growing gas market in Nigeria

31%

Domestic/regional (Power, Industries & WAGP): 1.3 Bscf/d

16% 44% 9%

Export –LNG/ GTL/NGLs: 3.6 Bscf/d Re-injection & other operational usage 2.5 Bscf/d Flared gas: 0.7 Bscf/d

Gas Production

• 8.1 Bcf/d

Vast natural gas resource: 2P gas reserves of 201 Tcf, ranked 10th globally & 1st in Africa; Undiscovered potential of ~ 600TCF (USGS) A key gas exporter (LNG/GTL) with 44% of its daily production exported, 47% consumed internally while flaring has drastically reduced to ~9% Base Case domestic gas demand to reach 7.4bscfd by 2027 driven by the power sector to improve electricity access and to substitute the small-scale generators to reduce emissions (pollution) Nigeria’s LNG export capacity to reach 30 MTPA by 2024 and with our scheduled FID for the 8 MTPA N-LNG Train 7 before the end of the year

Data: NNPC Aug 2019

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Recent efforts in Nigeria/NNPC towards positioning natural gas for sustainable development

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Policies and regulations

The 7 Big Wins Initiatives (MPR) and the National Economic Recovery and Growth Plan (ERGP 2017-2020) The National Gas Policy (2017) Policy and actions of the Nigerian Govt. in the natural gas sector medium to long - term resource exploitation growth and utilization Flare Gas Regulations (2018) Reduce environmental and social impact due to gas flaring, protect the environment, prevent waste of natural resources and create social and economic benefits from gas flare capture Nigeria’s Petroleum Industry Bill (PIB): Expand economic growth via improved revenue flows from the oil/gas sector and make the industry efficient and competitive

Key projects to support domestic gas expansion and pipe gas/LNG export potentials

7 Critical Gas Development Projects: harness gas resources and provide infrastructure to add 3.5 Bscf/d of gas to the domestic gas markets Domestic/regional gas pipeline and facilities projects e.g. AKK (support 3.6 GW power projects), OB3, Nigeria-Morocco Gas Pipeline (NMGP) project etc.; Expansion of Nigeria LNG capacity from 22 MTPA to 30 MTPA by 2024 to capture international gas market opportunities Development of gas- based industry parks/hubs such as petrochemicals, fertilizers, etc. to add value to the natural gas

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...roadmap to Africa’s Industrialization – Nigeria & West Africa

Gas Industrial Revolution Park, Ogidigben, Nigeria Ajaokuta – Kaduna- Kano Gas Pipeline

WAGP

7CGDP

1 ANOH

600

mmscfd

400

600

mmscfd

600

mmscf d

270

mmscfd

400

600

mmscfd

TOTAL 7CGDP

3,500

mmscfd

West African Gas Pipeline (WAGP)

Major Projects

Nigeria – Morocco Gas Pipeline 7 Critical Gas Development Projects – 3.5Bcfd Nigeria LNG Train 7

Concluding Remarks

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Re-structure the energy framework in favor of clean and environmentally friendly energy sources Embrace technological developments to make such fuels(s) more affordable and with less carbon print Develop innovative project financing mechanism for gas exploitation and infrastructure along the value chain Leverge on natural gas active role in the energy arena and its credentials and develop cooperation/collaboration with strong partners to chart pathways for sustainable future energy Gas advocacy and effective communication of the emerging challenges and opportunities

• f the energy sector to policy/decision makers

Thank you for listening

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Back up Slides

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Unlocking the Natural Resources Potential in Africa with Natural Gas

Mozambique

Nigeria 201TCF Algeria 159TCF

Mozambique 100TCF

Egypt 63TCF Libya 53TCF

Angola 15TCF

5TCF 5TCF

3TCF 3TCF

2.3TCF

This enormous Natural Gas Reserves of 614TCF when efficiently harnessed would unlock the huge natural resources (Gold, Diamond, Iron Ore, Steel, etc) potential within Africa through the emergence of a wide range of industrial clusters around petrochemical, manufacturing, agro-business and fertilizers among others.