Gas will be the dominant energy source of the future as the world population grows and demands cleaner energy. Gas reserves are increasing globally and new sources like methane hydrates are being developed. Gas provides cleaner and more affordable energy than other sources for power, transport, cooking, heating, and industries like petrochemical plants and liquefied natural gas (LNG). Countries like Qatar have transformed their economies by utilizing their large gas reserves for industries and exports. Nigeria has significant gas reserves but they remain largely untapped despite plans for gas-based power, industrialization and LNG exports. Challenges include gas flaring, lack of cooperation between oil companies and government, and declining oil prices impacting investments. Greater focus and cooperation are

1. Gas – Dominant Energy of the Future
Mr. Babs Omotowa
16th January 2015
Managing Director/CEO, Nigeria LNG Limited
Vice President of Bonny Gas Transport Limited.
SYMPOSIUM
IN HONOUR OF CHIEF F.R.A. MARINHO AT 80
Nigeria’s Energy Evolution – A glimpse of the future

2. “Maverick Pioneer”
We celebrate you today
• First MD, Nigerian National Oil Corporation (NNOC)
• First GMD of the NNPC
• Former Board Chairman of the NLNG and BGT.

3. The World
• World population 9bln in 2050
• Majority in developing countries
• Energy demand will increase
• World demands cleaner energy

4. Gas fastest growing
BP Energy Outlook 2035 www.dieoff.org

5. More gas…
6,866 TCF
7,299 TCF
100,000 TCF
Methane Hydrates
• Japan – 1st successful extraction in 2013
• Plan commercialization within 10 years

6. Gas Value
.
Power Transport Cooking and heating
• Cheaper, Cleaner, Abundant, Industrialization, Revenue,
Industries – GTL, Petrochemical, LNG

7. petrochemical , refining, LNG, GTL Oil Exploration
Qatar example
LNG - 26% mkt share 3 large GTL - Palm, Oryx, Pearl
Mega Industrial cities
Production
77mta
Revenue
$91b/yr
Employment of 1.3m (local/expats) in Qatar
Qatar – 3rd largest gas reserves, 2nd largest exporter
Transformed from small emirate to global powerhouse
Production
400K bbl/d
Revenue
$16b/yr
Infrastructure/Service
(local content)

8. Nigeria - Gas
Export - LNG
.
Power generation Domestic LPG Petrochemical (Eleme) Gas Master plan
Initial growth in reserves but now stagnant and still remains largely untapped
1. Gas to power
2. Gas based
industrialization
3. High value Export
NLNG – 22mta, $80b, 4% GDP 3bcf of gas 700m scf of gas • 350kMT/a – polyethylene,
polypropylene
• FDI- $1.2b, $3.7b by 2017
• Revenue - $280m
Adequate for all sectors

9. …Still flaring
• 50% reduction from 1996 • > 1bscf flared daily

10. Observations
Independent Producers entry
IOCs divestment - 19 OML (11% )
• IOC commitment to Nigeria?
Independent producers capability
• World standards field practices?
• Investment to stem natural
decline and growth?
• More investments
• More projects e.g.
Bonga, Erha, NLNG
NOC & IOC Cooperation/Trust(?)
1971 till 1999
• Less investment
• Divestment (Risk,
uncertainties, etc.)
1999 till date
• JV - budget/funding , projects/contract approval duration, etc
• PSC – Reconciliation, Gas ownership, etc.
• PIB – divergence even before involvement of legislature.
• Insecurity/Bunkering – Collaboration and integrated approach?
• NCD – Real capacity development? i.e. Mesaieed city in Qatar
Could more have been achieved working together?

11. …not any easier
IOC & Independent producers
• CAPEX prioritization
• Favorable ROI country
• Business climate
Investments in gas projects in the short term?
$110 <$50
>50% drop
Oil price
Japan
Europe
US
$18 <$10
$10 <$7
$4 <$2.50
Gas price
Government
• Reduced revenue
• Inflation/Devaluation
• Austerity measures
• Social impact

12. Thoughts
Extend focus on ‘Gas to Power’ to
allied industries (Petrochemicals /
Methanol etc) in integrated manner
.
The sector needs to work more
together in one voice/accord
– NOC, IOCs & Independents
Gas is the future and Government
role is key on policy, business
climate, investment model etc.
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