Nigeria earned N119.4 billion from gas sales in the first quarter of 2022 (Q1’22), according to data from Nigerian National Petroleum Company Limited (NNPC).
The high revenue is a result of the rising prices of energy products because of the ongoing war between Russia and Ukraine.
The figure represents 64.32 per cent as the nation earned N72.64 billion in the first quarter of 2021.
The data also showed that gas revenue in the first quarter of 2021 was 17.6 per cent higher than N101.5 billion recorded in the fourth quarter of 2021.
The NNPC Group Managing Director, Mele Kyari, the revenues came from gas export and feedstock to the Nigeria Liquefied Gas Limited (LNG).
He said: “There is a problem with gas flares. We are flaring gas in very many locations that we shouldn’t because we don’t know what to do with it. Today we are pooling resources and partners together to take out those flares.
“At the central level, no projects with any flare plan will pass again. We, as their partner, any project with flaring as part of the plan will not scale through. This is one thing we are doing that is very practical.”
However, the ‘Meristem Gas Industry Update’, in its research report stated that Nigeria’s LNG export was 59.48 thousand metric tonnes in April 2022 as against 74.16 thousand MT recorded in January. This represents 19.79 per cent decline.
The report from the organisation which is a Lagos-based investment and corporate finance firm explained that only a fraction of Nigeria’s gas reserves have been tapped.
It added that few players exist in the space owing to the capital-intensive nature required in setting up gas infrastructure, as well as its storage difficulties, making it hard for producers to engage in gas exploration without potential off-takers.
It said: “Other factors such as the growing divestment of oil assets by International Oil Companies (IOCs) and pipeline sabotage has led to production decline. For context, about 70 per cent of total gas produced in Nigeria is Associated Gas (AG), which refers to natural gas captured when drilling for crude oil. Hence, this highlights the impact of waning oil activities on gas production.
‘‘Nonetheless, export sales began to rise in February this year, a turnaround from its year-on-year downtrend. NNPC’s monthly report shows gas export sales in February more than doubled compared to the same period last year. Surging gas prices in the international market have anchored gas sales given the declining export.
“However, we believe a now clearer fiscal guideline put in place via the Petroleum Industry Act would spur investment into the sector.”