Update on the Nigerian Gas

Master-plan
Dr. David Ige
Group Executive Director, Gas & Power NNPC

June 5th 2013

NOG Tech
Lagos, Nigeria

Outline

Overview of the Nigerian Gas Sector

Our Scorecard
Gas Industrialization
Investment Opportunities
Conclusion
2

Overview of the Nigerian Oil & Gas Industry

- Nigerian Oil & Gas Reserves Overview
Nigerias abundant oil and gas reserves base creates a robust platform for investment opportunities.

Nigerias Crude Oil Reserves (1980-2010)

40

Reserves (Billion) Barrels

35
30
25
20
15
10
5
0
Source: BP Statistical Review or World Energy 2011
EU Energy Portal; Transparency International, 2011 Report on
Oil and Gas Companies; NAPIMS, Daily Gas Production and
Utilisation Report (August 16, 2011)

Overview of the Nigerian Gas Industry

- Undiscovered Potential

600TCF Undiscovered Potential

Undiscovered potential is ever greater!

4

Global Context
- Huge Discoveries Globally

US
natural
gas
resources have nearly
doubled through Shale
finds
Significant discoveries
in East Africa
Further discoveries in
West Africa
SOURCE: EIA; Deutsche Bank; Shale Gas.com; USGS; NPC; company announcements; Team analysis

Recent changes in global energy dynamics shift attention to market share particularly in the East.
India is a key part of that discussion
5

Our Strategic Aspiration for Natural Gas

STRATEGIC THEMES OF GAS
MASTER PLAN

GAS TO POWER

GAS BASED INDUSTRIALISATION

By 2014, we would have
positioned Nigeria firmly as
the undisputed regional hub
for gas-based industries such
as fertilizer, petrochemicals
and methanol.

Deliver Gas for at least threefold

increase in generation capacity by
2015

Deliver on Presidents Gas

Revolution Agenda to:
Create regional hub for gas-based
industries fertilizer, petrochemical and
methanol
Transform gas sector to value adding
sector

HIGH VALUE EXPORT

LNG

Regional
Pipelines

Consolidate Nigerias position and

market share in high value export
markets
Regional gas pipelines consolidate
national footprint and influence

We are pursuing a clearly articulated agenda in gas

6

Unprecedented Growth in Gas Sector

868,000BOE

926,000BOE

The strategy paves way for an unprecedented growth potentially making Nigerias gas sector
number 5 in Africa in terms of BOE. FGNs policy thrust through the Gas Master-plan has been to
7
enable this growth

The Gas Master-Plan

- 4 Step Roadmap to Full Market Driven Domestic Gas Sector

Willing
Buyer
Willing
Seller!!
8

The Gas Master-Plan

- 4 Step Roadmap to Full Market Driven Domestic Gas Sector

The vision is to attain full market status with willing buyer willing seller by 2014/2015
9

Enabling Policy Framework

To support the gas agenda we embarked on an aggressive policy framework revamp to create an
enabling investment environment

DSO Regulation in place to

jumpstart gas availability in the
short-term. Also legislative
reform through the PIB being
concluded

Bankable commercial framework

reforms in pricing and revenue
securitization to enable
sustainable investment in gas
supply
Scalable Gas
Infrastructure
Blueprint
National Blueprint for Backbone gas pipeline
and processing infrastructure that will enable
flexibility in supply delivery
10

Outline

Overview of the Nigerian Gas Sector

Our Scorecard

Gas Industrialization
Investment Opportunities
Conclusion
11

mmscfd

Current Status of Domestic Gas Supply

Domestic supply is
growing steadily and
to forecast!

We have grown utilizable domestic gas supply capacity to highest ever level of 1500mmcf/d and
still growing
12

Additional Gas Supply Projects

A second wave of supply projects is being developed with planned capacity of 2150mmcfd between 2015 and
2019 effectively doubling the domestic gas market. A total of 6 projects are being progressed at various stages
of development
13

Impact on Power Sector

- Gas to Power
Gas to Power (2013-15)

Gas to Power (Longer Term View)

Meeting the Power Sector requirement is a focus area for the gas sector and good progress is
being made

Domestic Gas Reforms

- Gas Pricing Reform

Pricing reform is taking hold, creating a more robust basis for investment in supply
15

Progress Update on Gas Infrastructure Development

Steady progress has been made in delivering the critical pipeline infrastructure. This will address many of the
gas deliverability challenges

Oben Geregu

36 x 136km; from Oben to Geregu

Project completed in Nov 11
Addresses supply deliverability to Geregu
power plant and future expansions

ELPS 2 Oben-Lagos

36 x 324km;
Ongoing project will double
capacity from 1bcf/d to
2bcf/d by Early 2014
Project is ongoing
Enable expanded supply to
support all future power and
industry expansion

Obiafu/Obrikom - Oben
(OB3)
48 x 127km;
Contract was awarded by FEC
in April 2012
Detailed engineering almost
completed
Completion Date Early 2015

2
2

Itoki- Olorunshogo

24 x 31km;
Project has been completed
and currently supplying gas
to Olorunshogo power plant
Addresses permanently the
challenge of supply delivery
to Olorunshogo PHCN/NIPP
Plants

ELPS A Escravos Warri Oben

24/30 x 104km;
Project has been completed
Addresses stranded gas in Escravos additional
80mmcf/d (300MW) is currently supplied to the
domestic market and a further 70mmcf/d(250MW)
by October
16

Gas Pipeline Infrastructure

ELPS 2 (Oben Lagos)

Project ongoing

Expected completion
date Early 2014

Ob/Ob Oben (Ob3 pipeline)

Project ongoing,
commenced detailed
engineering

Expected completion date

Early 2015

AKK and CAP projects

Planned
gas supply

Planned
to kick off in
availability
2013

Expected completion
date - 2017

17

Outline

Overview of the Nigerian Gas Sector

Our Scorecard

Gas Industrialization

Investment Opportunities
Conclusion
18

Gas Based Industrialization Agenda

- The Ogidigben Industrial Park
Aims to create the largest gas industrial park Sub-Saharan Africa with Fertilizer, Methanol and
Power projects.
PETROCHEMICAL PLANT

CENTRAL PROCESSING FACILITY

FERTILIZER PLANT

Anchor
Investors

Support
Investors
- SPV

FTZ BASE INFRASTRUCTURE

PORT INFRASTRUCTURE

POWER PLANT

OTHER SUPPORT SERVICES

19

Ogidigben Gas Based Industrial Park

- Africas Largest Gas City

20

Outline

Overview of the Nigerian Gas Sector

Our Scorecard

Gas Industrialization

Investment Opportunities

Conclusion
21

Investment Opportunities
Aims to create the largest gas industrial park Sub-Saharan Africa with Fertilizer, Methanol and
Power projects.
PETROCHEMICAL PLANT

CENTRAL PROCESSING FACILITY

FERTILIZER PLANT

Anchor
Investors

Support
Investors
- SPV

FTZ BASE INFRASTRUCTURE

PORT INFRASTRUCTURE

POWER PLANT

GAS PIPELINE INFRASTRUCTURE

22

Outline

Overview of the Nigerian Gas Sector

Our Scorecard

Gas Industrialization
Investment Opportunities

Conclusion
23

Conclusion

Reforms are being put in place and holding

Aggressive expansion plans and huge investment opportunities
You can playing a key role by taking opportunities as they come
Contrary to some view, Nigeria is open to business

Now is the time to invest in the gas sector of Nigeria just

examine the fundamentals!!!

24

THANK YOU

25

The Domestic Supply Obligation Policy

The gas supply to underpin agenda is from the Domestic Gas supply Obligation (DSO)

26

Domestic Gas Price Transition

27

Gas Pipeline Infrastructure Blueprint

- Aggressive Expansion in Progress

28

Ogidigben Gas Based Industrial Park

- Africas Largest Gas City

Gas Pipeline Investment Opportunities

Jebba

Geregu
NIPP
Ibadan

Olorunshogo

Ajaokuta

Oben

Omotosho
ELPS 2
ELPS 1

Obiafu/Obrikom

Egbin

Aba Industries

Obite
225mmscfd

Odidi
Ogidigbe
Industrial City

Erha

Unicem
Cement

Imo River

Forcados Yorki

Calabar
NIPP

Indorama
Cawthorne
Channel

Alaoji
NIPP

Uquo
GTS 1

Alakiri
100mmscfd
Alscon
Ibom
Power

Bonga FPSO

QIT

Bonny NLNG

30

Investment Opportunities: East-North Gas Transmission System

- A Private Public Partnership (PPP) Case

ELPS 2

Oben

Escravos

Obigbo Node

QIT

East-North Gas Transmission System

- Early Gas Scenario

32

Proposed Financing Structure

Equity

Debt

NNPC

EPC Contractor /
Contractor
Financing

FGN Annual
Appropriation

ECA

3rd Party
Equity
Participation

FGN
Eurobond

3rd Party Debt

Investment Opportunities

FINANCIAL SERVICES

7
PIPE MILLING AND
FABRICATION YARDS

$16 Billion
Investment
Opportunity

OGIDIGBEN FTZ INFRASTRUCTURE,

PORT INFRASTRUCTURE & REAL
ESTATE DEVELOPMENT

GAS TRANSMISSION
PIPELINES

UPSTREAM GAS
DEVELOPMENT

5
4

LNG & LPG PLANTS

GAS PROCESSING FACILITY /

GAS BASED MANUFACTURING
INDUSTRIES

34