Thursday, September 10, 2015 9:14 AM / FBN Capital Research
The benefits of natural gas are numerous. It is a cheaper source of energy for manufacturers and a cleaner energy source generally.
According to the Nigerian National Petroleum Cooperation (NNPC), Nigeria’s gas reserves stand at about 182 trillion cubic feet (tcf), representing the eighth largest in the world and foremost in Africa.
Despite this ranking, domestic demand for gas far outweighs supply due to inadequate infrastructure. Industry experts estimate that while most of Nigeria’s potential supply is trapped in production fields, about 50% of gas produced is lost through pipeline vandalism.
The recent improvement seen in the power supply has been linked to reduced gas pipeline vandalism and a boost in domestic gas supply.
A preliminary report prepared by the NNPC disclosed that the corporation has posted a 37% increase in gas supplied to the power sector, to about 860 million scf (mmscf/d) of gas per day.
The insufficient power supply emerged as the leading constraint in the most recent Business Expectancy Survey by the CBN (Q1 2015). Other constraints included inaccessibility to credit, an unfavourable economic climate and unclear economic laws.
A power poll recently released by NOI Polls revealed that between April 2015 and June 2015, Nigerians typically spent a maximum of N3,726 (US$19) on actual electricity supply and as much as N12, 351 (US$62) on running alternative sources of power supply. The average power supply was 4.9 hours in Q2 2015.