By:

Dr. Timothy Okon, Senior Adviser Fiscal Strategy to the Minister of State for Petroleum Resources

Adegbite Adeniji, Senior Technical Adviser for Gas and Upstream to the Minister of State for Petroleum Resources

Adedayo Adeshina, Coordinator, Nigerian LPG Expansion Plan

Joshua Egba, Business Development Specialist, USTDA

With significant gas resources, Nigeria has the potential to accelerate national development and quickly meet the targets of its economic recovery and growth plan. However, many of these resources remain untapped because of issues related to demand, pricing, and infrastructure deficiencies. Associated gases have been flared for decades, wasting valuable resources and constituting significant health and environmental hazards.

In March 2017, the U.S. Trade and Development Agency (USTDA) funded a reverse trade mission that introduced high-level decision-makers from Nigeria’s natural gas sector to leading U.S. technologies, equipment, and services to increase access to gas for power generation projects in Nigeria. The visit exposed delegates to best practices and U.S. policies, regulations and financing mechanisms that can support the implementation of gas projects in Nigeria.

Macroeconomic stability, transparent process of access to natural resources and, policy consistency are critical to attracting investment in gas resources. Nigeria understands this and in 2016, the Nigerian government released a draft National Gas Policy for public discussion. The goal was to accelerate the development of gas projects by establishing an appropriate institutional, legal, regulatory and commercial framework for the gas sector that would remove barriers to investment and development.  The government also announced a program for the commercialization of flared gas aimed at monetizing flared and stranded gas.

The long-term goals of the National Gas Policy are to develop new gas projects and to build Nigeria’s gas distribution infrastructure. The Nigerian government estimates that the demand for liquefied natural gas (LNG) will hit $25 billion by 2021, while it expects to attract over $3 billion in investment from the commercialization of gas flares by 2018.

The reverse trade mission supported Nigerian policymakers in the development of the gas policy aimed at diversifying the Nigerian economy by providing private local gas developers with an opportunity to observe U.S. technologies in practice as they seek to invest in a $30 billion market.

U.S. industry is strategically positioned to support Nigeria’s gas planning through the provision of gas flare capture technologies, as well as virtual pipelines to provide short to medium term solutions for transporting gas. USTDA’s visit provided a forum for productive discussions among the Nigerian and U.S. gas industries. For example:

• One Nigerian gas producer with stranded gas assets spoke directly with a U.S. company producing the technology to access those assets;
• A public/private crude oil joint venture in the Niger Delta with production shut-ins met with a U.S. company that had concrete barging solutions with the potential to save them over $2 million per day;
• A Nigerian CEO with a significant repair bill for his turbines met the U.S. turbine manufacturer who could save him millions of dollars and significantly reduce the delivery time for the equipment.

Through this visit, opportunities for deal making were plentiful. Building on these efforts, USTDA and U.S. industry launched the U.S. Gas Exports Infrastructure Initiative, which includes a call for project proposals, new reverse trade missions, in addition to USTDA’s project preparation toolkit, all focused on advancing gas infrastructure in countries like Nigeria.