Introduction
Natural gas is an energy source often used in the manufacture of plastics and other commercially essential organic chemicals as a heating fuel, cooking gas, fuel for automobiles, fuel for electricity generation, and petrochemical feedstock. Hydrocarbon gases (methane, ethane, propane, butane, pentane and heavier hydrocarbons), non-hydrocarbon gases (carbon dioxide, hydrogen sulfide, nitrogen and water vapour) and occasionally mercury are the components of natural gas. During the discovery of crude oil, natural gas is not directly searched for, and it is only as an ‘accident’ that it is discovered either alone or with crude oil. Natural gas is found either as associated gas, or non-associated gas or as condensate, deep underground formations. During the production of crude oil, the associated gas is generated through separators. Before it can be used, natural gas needs processing. In the British thermal unit (Btu), the amount of energy obtained when a unit volume of natural gas is burned is determined and called the Heating Value.
Capacity to Produce Natural Gas
Nigeria is a growing economy that depends on both crude oil and natural gas from the domestic and international market. According to the EIA (2020), Nigeria had an estimated 200.4 trillion cubic feet (Tcf) of proven natural gas reserves, the largest natural gas reserves in Africa. EIA (2020) also asserted that the current annual gas production of Nigeria is about 1.6 Tcf of dry natural gas in 2019. Comprehensive and integrated gas utilization Master plan/programmes have been embarked upon, in which natural gas developments is being given priority. A large amount of the total natural gas output of Nigeria is either re-injected or flared. Some of Nigeria's oil fields lack infrastructure, known as associated gas, to collect the natural gas produced with oil. According to the most recent data by the World Bank’s Global Gas Flaring Reduction Partnership (GGFR, 2020), Nigeria flared about 37.89 billion cubic feet (Bcf) of natural gas from 2015 – 2019, making Nigeria the seventh-largest natural gas flaring country in terms of annual natural gas flaring volume (see fig 1).
This volume of flared gas is not unconnected to the inadequate storage system and processing facilities, low domestic and industrial utilization of gas; lack of natural gas transmission, distribution systems, and irregular pricing policy. As a result of this less attention is given to the natural gas flared without imagining its contribution to the Nigeria economy. This could have resulted in creating new industries; capturing economic value and generating as much revenue from gas as from oil. The expected result could also increase export earnings from LNG, coupled with adequate domestic power supply, will strongly support and broaden economic expansion and urbanization. Consequently, this will increase the income-generating capacity of Nigerians and lift the general wellbeing of Nigerians. It will further reinforce the Government's efforts towards integrating the Host communities into the mainstream of national development and growth.
Potentials of Natural Gas to Boost Economy
The country aims to improve the Nigerian economy by leveraging the full potential of the natural gas it provides. These include Liquefied Natural Gas (NLNG), the Gas-To - Liquid Project, the Liquid Natural Gas Project, the Gas Injection Project and the Gas Pipeline Project. All these ventures have the potential to contribute to the economy of the country. For many industries to drive heavy-duty machinery, heat for domestic use, and feedstock for petrochemical industries, natural gas is an important energy source for power plants to produce electricity. When combusted, it is cleaner, releasing little or no harmful environmental by-products and adding the least amount of Green House Gas (GHG).
Natural gas in Nigeria has the potential to boost the economy and the well-being of its people. It can be used to generate electricity to power companies and lighten houses. Two main turbines that produce electricity through a rotating shaft are gas turbines and steam turbines. Both turbines utilize natural gas as the primary fuel for energy input to the turbine. While gas turbine utilizes the heat energy generated from the combustion of the gas to drive the turbine shaft, the steam turbine utilizes the heat energy to generate super dry steam, which drives the turbine shaft. Thus, generate electricity to put machines and electrical appliances into use.
Improved employment of Nigerians by the natural gas industry is guaranteed in a country where the rate of unemployment is 12.84%. The industry also has the capacity to create employment in ancillary firms which are dependent on the industry. With the natural gas endowment, Nigerians can be employed in exchange for wages and salaries. The employees will increase their demand for consumer goods and this will trigger the manufacturing sector to produce and supply more of the product to the market. In trying to maximize profit, the industries in the manufacturing sector will be cost-effective by opting for low and efficient inputs. Factors inputs will then be allocated efficiently in order to maximize output and revenue. Natural gas as low cost, effective and clean energy will lead to the use of energy to power machines in the industries. This will generate more revenue for oil and gas industry and policies will be put in place to devise means of saving and storing the natural gas. A resource allowed to flare would now be sold to generate more revenue. The oil & gas and manufacturing sectors will be motivated to save excess of the revenue that is generated. This will in turn aid the financial institution to spread and render financial aid for short term to other sectors of the economy.
Demand is already high, companies and industries will generate revenue within a short period of time. This will enable them to pay both the principal and interest attached to the financial institutions. The purchasing manager of the manufacturing sector which has hit sixth-month slow growth will pick and this signals a rise in the gross domestic product with a moderately monitored rate of inflation. Natural gas is an apt product when it comes to low volume of emission from transportation. Compressed natural gas is presently used as fuel for vehicles. The Compressed Natural Gas (CNG) is not only cheap and clean to use compared to petrol but Nigeria economic growth can as well be boosted via sales of the natural gas to the gas processing company.
The contribution of Nigeria's oil and gas sector to the Gross Domestic Product (GDP) is nearly nine per cent in the second quarter of 2020. Between April and June 2020, the oil and gas industry contributed up to 8.93 per cent of the total real GDP, a slight decrease compared to the same period of 2019. As stated the sector accounts for about 9% of Nigeria’s GDP and 91 per cent of Nigeria's export value was generated by mineral fuels, oils, and distillation products' sector in 2018, accounting for approximately 58 billion U.S. dollars. The oil and gas sector in Nigeria has the potential to contribute much more to Nigeria’s GDP than it currently does. The Federal Government of Nigeria must not be complacent because the sector generated nearly all of the Federal Government’s revenue through royalty payments and taxes. With increased in-country petroleum refining capacity, the petroleum sector will be more connected to the wider economy, resulting in a greater contribution to the country’s GDP.
Conclusion
The capacity of Nigeria to produce natural gas, her gas reserve and the volume that the country flared for four years, the consequence of which is the pollution of the air, water, and soil, had been discussed. The article also showed various plans to boost the production of natural gas and how the product can enhance the Nigerian economy. Coupled with the fact that in December 2019, Nigeria Liquefied Natural Gas (NLNG) added about 365 Bcf to increase the total capacity of the facility to 1.6 Tcf, NLNG should not relent in its effort to meet its plan by 2024 to be operated by Shell (25.6%), and the other shareholders are Nigeria National Petroleum Corporation (NNPC) (49%), Total (15%), and Eni (10.4%). A lot of investment opportunities abound in the natural gas sector and attention is focused on this vital sector so as to actualize Government's aspirations of natural gas export, transportation, industrial and home use.