Gas Infrastructure and Supply

January 20, 2012

Dr. David Ige
Group Executive Director, Gas & Power
Nigerian National Petroleum Corporation
Gas Strategy and Anchor Sectors
GAS TO POWER
By 2014, we would have
positioned Nigeria firmly as the
undisputed regional hub for
gas-based industries such as
fertilizer, petrochemicals and
methanol.
GAS BASED INDUSTRIALISATION
HIGH VALUE EXPORT
STRATEGIC FRAMEWORK FOR
NIGERIAN GAS
Consolidate Nigerias position and
market share in high value export
markets
Targeted LNG export opportunities
Regional gas pipelines that help
consolidate nations footprint and
influence
Deliver on Presidents Gas
Revolution Agenda to:
Position Nigeria as the regional hub
for gas-based industries such as
fertilizer, petrochemical and methanol
Transform gas sector to value adding
sector
Significantly increase gas supply
to the Power Sector
Focused delivery plan to support
existing and ongoing power
plants by PHCN and NIPP
Deliver Gas for at least 12GW by
2015
LNG
Regional
Pipelines
2
Gas Consumption and Demand Forecast
Based on the forecast growth in domestic gas demand, we foresee opportunities in
transmission and marketing
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1
9
7
5
1
9
7
6
1
9
7
7
1
9
7
8
1
9
7
9
1
9
8
0
1
9
8
1
1
9
8
2
1
9
8
3
1
9
8
4
1
9
8
5
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
m
m
s
c
f

Year
Nigerias Historical and Projected Gas Demand
Power LDC GBI WAGP
3
Gas Availability
- Sources of Gas in Domestic Market
FGN Mandated Domestic
Supply Obligations (DSO)
Direct Bilateral Arrangement
between Suppliers and
Buyers
Unutilized Gas Flares
Most significant short/medium term
planned source of gas
Allocation of available gas from
DSO sources managed by GACN
3 Sources of Gas in Nigeria
Gas from suppliers over and above their
respective DSO
Managed bilaterally on a willing buyer,
willing seller basis i.e. negotiated terms
Limited volume in the short term,
particularly from IOCs.
Small flared gas for which no plan exists
to utilize but 3
rd
party players may
propose utilization plans
4
Domestic Supply Obligation Western Area Supply
Projects
3
4
2
1
1 Dry Gas
2 Existing Wet Gas 3 Ongoing Projects - Wet Gas 4 FID Acceleration - Wet Gas
5
5
Gas from East
5
Domestic Supply Obligation Eastern Area Supply
Projects
6
Analysis of Stranded Gas in the East
A significant amount of gas is stranded currently in the East mainly due to infrastructure and
the delays in NIPP power plants

7

Koko Port
Bonny LNG
Escravos
Ob/Ob
Oben
Utorogu
Egbin
Olorunshogo
Omotosho
Ihovbor
Geregu
Afam
Delta IV
Abuja
Kaduna
Calabar
Map showing critical Infrastructures
8
Sapele
Western Network Pipeline System
ELPS A
Escravos to Warri expansion
from 300mmcf/d to 600mmcf/d
Will allow immediate addition
of 80mmcf/d from Escravos
Due end 2011
Looping ELPS C
Doubling capacity to 2bcf/d from
Warri to lagos
Due August 2012
Pipes expected in October
Olorunshogo Permanent Line
24permanent line to Olorunshogo.
Recent contract approval by Mr. P and
contractor being mobilized. Due Apr
2012
Will address pressure problem at
Olorunsogo
9
QIT
BonnyNLNG
Uquo
Alscon
Ibom
Power
Calabar
NIPP
Unicem
Cement
Imo River
Obigbo
Alaoji
NIPP
Aba Industries
Notore
Indorama
Obiafu/Obrikom
Obite
Ubeta
Rumuji
Alakiri
GTS1
Cawthorne
Channel
Escravos
Oben
Geregu
NIPP
Ajaokuta
ELPS1
ELPS2
Egbin
Olorunshogo
Omotosho
Koko Gas
Industrial Park
Ibadan
Jebba
OUR
Oso
Existing Gas Source
Existing Pipeline System
Ongoing/Planned Pipeline system
Legend
Power Plant
Industries
Ongoing Pipeline Projects ELPS Phase 1
11
Horizontal Directional DrillingOperation across Warri
Benin Express way
Loweringof welded line pipes at NGC Right of Way
through Jesse, Delta State
Weldingactivities for Ethiope River Crossing
Ongoing Pipeline Projects Alaoji, Olorunshogo
12
Pipe stacked on Site
Offloadingpipe on site
ROW Clearing
Roadmap to Securing Alternative Funding for
Pipelines
Assess Pipeline Tariff
Review Tariff
Affordability
Review revenue
securitisation
Source for
Investors
Secure Financial
Closure
Assessment of
pipeline tariff required
to make 3
rd
party
financing viable this
study now completed
by NNPC
Engagement of
stakeholders (e.g.
NERC) on affordability
of tariff and implication
for medium-term MYTO
Checking of possible
tariff revenue
securitisation to
make 3
rd
party
financing bankable
Road show to attract
investors / financiers,
selection of willing
financiers/investors
Investors secure financial
closure
Description
Sept 2011 Dec 2012 Jun 2012 Jan 2012 Dec 2011
13
Gas to Power Supply Outlook
14
New Gas Sources of Gas to Bridge Gap
New sources of gas, hitherto not considered for domestic market e.g. bringing offshore PSC
gas to shore, are being evaluated. This could add 400-500 mmscf/d by 2016/17
Koko
1
2
Erha Bosi - Development of offshore processing
plant with offshore pipeline to transport about
400mmscfd of gas currently being re-injected to
the western CPF in Koko.
CAMAC Oyo Field Development Following
options are being looked to monetized the
currently re-injected 100-200mmscfd gas in Oyo
field :
a. Offshore pipeline from Oyo to the
western CPF in Koko
b. Offshore pipeline to ELPS via Chevron
Okan gas processing plant
c. Offshore pipeline to OGGS
1
2
15
Conclusion
We have an enabling policy framework is in place to support
critical mass of gas supply development for the power sector

Very good progress being made in development of a robust gas
grid that will enable rapid growth of supply from diverse sources
increasing the liquidity of supply

Medium term outlook is promising and power sector investors can
be assured of supply

16

APPENDIX
17

Changing Power Demand
18
Overview of the Nigerian Gas Industry
Gas Resource Base
1,680
1,046
899
265 263
245
199
187
176
159
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
T
r
i
l
l
i
o
n

c
u
b
i
c

f
e
e
t

Proven Natural Gas Reserves, 2010
Source: EU Energy Portal; Transparency International, 2011
Report on Oil and Gas Companies
Nigeria has a huge economic potential trapped in this vast natural gas resource
600TCF Undiscovered Potential
19
Enabling Sector Policy Stimulating Supply
To support the agenda, a set of enabling policies were approved by His Excellency, Dr.
Goodluck Jonathan. These are being rolled out and have created a major boost and
jumpstart for the sectors agenda

Scalable Gas
Infrastructure
Blueprint
20
Strategy Aggregator Company:
Gas Aggregation Company Nigeria (GACN)
Gas Aggregation Company
Nigeria (GACN) Contact
Details:

Office: #1B Malcolm Fraser
Street, Asokoro, Abuja

Telephone: 098759045

Email: info@gacn-nigeria.com

GACN was established to manage the Domestic Supply Obligations Facilitate gas access and
aggregation of gas pricing
21
Status of Major Infrastructure Projects
22

Eastern Network Pipeline System

Completion of the NOPL pipeline in 2012 will unlock stranded gas from MPN (100mmcf/d); NAOC
Ebocha (50mmcf/d) and TEPNG (60mmcf/d), bringing them to Obigbo Node hub from where Alaoji and
other Eastern Power plants can be supplied
23

Eastern Network Pipeline System

24
Our efforts in Power are focused on meeting a projected 3.5 bcf/d of gas demand by over 30
existing and proposed power plants.
Gas to Power
PHCN
818 mmscfd
1
NIPP
1,297 mmscfd
2
JV IPP
322 mmscfd
3
3
rd
Party IPP
531 mmscfd
4
Egbin +AES
Delta IV
Sapele
Olorunshogo
Omotosho
Geregu
Afam I-V
Olorunshogo
Sapele
Geregu
Omotosho
Ihovbor
Egbema
Gbaran
Omoku
Alaoji
Calabar
Chevron Agura
NAOC, Okpai
Total, Obite
Shell, Afam VI
ExxonMobil, QIT
0
500
1000
1500
2000
2500
3000
3500
Q4 2011 2012 2013 2014 2015
m
m
s
c
f
d

Power Sector Gas Demand
PHCN NIPP JV IPP 3rd Party IPP
Numerous 3
rd
party IPP in
consultation with the Bulk Trader

25
26
Was created to manage Domestic Gas Supply obligations volumes
First point of contact for Gas Buyers to access gas for domestic market use
Primary aim
Coordinate and manage wholesale gas supply from Gas Producers to eligible Gas
Purchasers within Nigeria
Ensuring a balanced growth of all critical sectors of the economy: Power, Gas Based
Industries and Local Distribution Companies
Conduct due diligence assessment on eligible Gas Buyers
Allocate available gas from the DSO to credible buyers successful on assessment
Facilitate the expeditious execution of the GSAA and GTA between the buyer, seller
and transporter respectively
Operational since Jan 2010
Role of GACN in Domestic Gas Market
27

Due Diligence General Process
28
Map showing critical Infrastructures
28
Critical Pipeline Projects
29