Nigeria to expand natural gas production

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ABUJA, Nigeria, Aug. 17 (UPI) -- The Nigerian government said it will greatly expand the country's natural gas production.

Nigerian Minister of Petroleum Resources Diezani Alison-Madueke said the government has initiated an extensive gas expansion project, which will add 120 million cubic feet of gas per day to Nigeria's natural gas grid.

The addition gas production should alleviate the country's difficulties of low natural gas pressure in the nation's pipeline network.

She told The Daily Trust newspaper that the change allows for officials to meet the "full requirement" of a series of gas facilities, including Egbin, the Sapele Power Holding Co. of Nigeria, Delta IV, Olorunshogo and both the PHCN and National Integrated Power Project plants along with the Omotosho PHCN power plants.

"The net impact of ... the addition of 120 million cubic feet of gas per day to the national power grid and the permanent elimination of the challenges of low gas pressure that has plagued the Olorunshogo PHCN and NIPP power plants," she said.

Alison-Madueke added that the country was positioned to supply gas to the Geregu Power plant and all anticipated expansions there.

Nigeria's government has stated that within the next month that it will increase natural gas supplies to both PHCN and NIPP-operated thermal power plants across the country with an additional 65 mmcf/d.

Where this new production will be exported is uncertain.

On Tuesday Nigerian National Petroleum Corp. Group Managing Director Andrew Yakubu said China had become the alternative market for Nigeria's crude oil, following dwindling imports by the United States, which was previously the major buyer of Nigeria's crude oil.

"The decision of the United States is not driven by the fact that they don't want to buy our oil; they have other issues," Yakubu said at a recent oil and gas conference in Lagos. "The shale gas (that) has been discovered ... is a major source of energy.

"But, of course, the good news is that there are other parts of the world that are interested. As you know, major demand growth is going to come from China and the East. So, that is a very good replacement of whatever shortfall we have with the United States."

In 2009, Nigeria exported more than 1 million barrels per day of crude oil to the United States but recently that has declined to roughly 352,000 bpd, representing a loss for Nigeria of roughly 70 percent of its previous U.S. market.

Penetrating Asian markets to make up for U.S. exports won't be simple as it is more difficult to ship crude oil from Nigeria to Asian countries than to the United States because of the added distance. The distance from the Shell's Bonny Export terminal in Rivers State, to Tianjin, China is more than 12,000 miles, compared to about 5,800 miles to New York.