Events

Articles  ·  Events
Courtesy Call to the Emir of Kano Mai Martaba, His Royal Highness Alhaji Aminu Ado Bayero

The CEO of GACN Mr Olalekan Ogunleye and his team paid a courtesy call to the Emir of Kano on Tuesday, 25th May 2021 at his palace in kano state and were received by the private secretary to his highness Mallam Abdullahi Haruna Kwaru. His highness assured us of his commitment and support on behalf of his people for GACN in regards to AKK forum which will be hosted in kano in July this year. He called on and entreated GACN to do everything possible to support the business community in kano and the economic development initiatives of the kano state government bearing in mind that kano is a commercial hub in the North and strategic point for industrialization. We were awed by the exquisite display of cultural regalia and exaltation by the palace entourage who welcomed us the royal way.

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Review of performance of domestic gas market in Nigeria in 2020

The Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, declared 2020 as ‘the year of gas for the nation,’ an announcement that set the theme for the year. Consistent with the Federal Government of Nigeria (FGN) drive towards transitioning to gas based economy, this decade has further been declared as “the decade of gas”.

Nigeria is the largest oil producer in Africa and holds the largest natural gas reserves in Africa. According to the Department of Petroleum Resources (DPR), Nigeria’s proven gas reserves has increased by 0.57% from 202tcf recorded in January 2019 to 203.16tcf as at June 2020.

Given the country’s huge gas reserves and the comparative advantage of gas as a cleaner source of energy, Nigeria has witnessed significant increase in domestic consumption. Studies have demonstrated that oil reserves may dry up in the next 40 years. Thus, there is a paradigm shift that Nigeria is now referred to as a gas producer with proven oil reserves rather than the traditional label of an oil producer.

A significant amount of Nigeria’s gross natural gas production is either exported or re-injected while the rest is consumed for domestic use or flared.

The domestic market is categorized into 4 Sectors as follows:

  • Power
  • Gas Based Industries
  • Commercial (Local Distribution Companies)
  • Domestic LNG (newest category)

Power sector is currently the largest offtaker of domestic gas in Nigeria.

The table below depicts an overview of performance of the domestic market in 2021 vis-à-vis  

NB: 2021 data represents Q1 ONLY.

Nigeria’s natural gas sector is affected by the following issues which invariably impacts performance:

  • Power sector value chain challenges particularly liquidity;
  • Forex exchange fluctuations occasioned by devaluation of the Naira;
  • Gas transportation/Infrastructure network and virtual pipeline solutions;
  • Regulatory framework including Fiscal incentives;
  • Gas Pricing

 

The domestic market witnessed significant events in 2020, some which are enumerated below:

  • Finance Act – Passed in January 2020
  • Increase in VAT from 5% to 7.5% – Passed in February 2020
  • Nigerian Gas Transportation Network Code (NGTNC) launched in February 2020, operationalized in August 2020
  • The Covid-19 pandemic
  • VAT Modification Order (VAT exempt items) – May 2020
  • Slump in Crude Oil prices
  • Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project – construction flagged off in July 2020
  • Review of the Petroleum Industry Governance Bill (PIGB) for anticipated passage
  • National Gas Expansion Programme (NGEP) to expand domestic Autogas – rolled out in December 2020
  • Commissioning of Dangote Fertilizer project (Train 1)
  • Entrance of new independent gas Producers

In conclusion, the domestic market is expected to continue to grow rapidly with support of the FGN’s drive to ensure that gas significantly contributes to the growth of the Nation’s economy through gas to power generation, creation of new Gas Based Industries and utilization of gas as automobile fuel (Autogas), evident by critical infrastructure such as Ajaokuta-Kaduna-Kano (AKK) gas pipeline, Obiafu-Obrikum-Oben (OB3) gas pipeline and Escavos-Lagos Pipeline System (ELPS 2) which are all currently being prioritized to support the FGN’s initiative.

Sources

  • Nigerian National Petroleum Corporation (NNPC)
  • Department of Petroleum Resources (DPR)
  • Gas Aggregation Company Nigeria Limited (GACN)
  • Energy Information Administration (EIA)
Articles  ·  Events
A Decade of Excellence – Highlighting GACN’s Achievements and Milestones within the Domestic Market in the Past Decade

In a bid to create a framework for the optimization of Nigeria’s vast gas reserves, the Nigerian Gas Master Plan (consisting the Domestic Gas Supply Obligation “DGSO”, the Gas Pricing Framework and the Gas Infrastructure Blueprint) was approved by the Federal Government of Nigeria (FGN) in 2008 with a view to pursuing a sustainable growth path and leveraging gas for the economic growth of the country.

Pursuant to the foregoing, Gas Aggregation Company Nigeria Limited (GACN) “Strategic Aggregator” was incorporated in January, 2010 as the vehicle for the implementation of the Nigerian Gas Master Plan (NGMP), further to the National Domestic Gas Supply and Pricing Regulations, 2008 (the Regulations).

Key Achievements in the Last Decade

GACN has `now operated within the domestic market for over a decade and has achieved great success particularly evidenced by the significant change in the domestic market including increased domestic gas utilization through its gas commercialization initiatives, acceleration of gas development/utilization projects and the gradual restructuring of the erstwhile uncoordinated domestic market framework. GACN’s activities have also gained increased visibility and recognition in recent years.

Other milestone achievements included the following:

  • Sustained gas supply of about 1.6Bscf/d, which accounts for about 80% of current Domestic Gas supply;
  • Recategorization of the textile industry to ensure stable gas supply to textile companies at a regulated price for the sustainability of the textile industry within Nigeria;
  • Flexible/short term gas sale arrangements bespoke to offtake and supply capabilities, allowing for third party opportunity for the commercialization of stranded gas while optimizing existing value;
  • Stable gas supply to thermal power generation to underpin about 2500MW;
  • Execution of the foremost private IPP GSAA for the Aba Cluster;
  • Execution of the first Domestic Mini-LNG GSAA in Nigeria with negotiations ongoing for other Mini-LNG projects;
  • Acceleration and on schedule maturation of critical GBI projects i.e. Dangote and Indorama Phase II fertilizer plants. GACN is also currently facilitating the MPN JV/NSIA/OCP Fertilizer project which is slated to be the largest fertilizer project in Nigeria, a part of the Presidential Fertilizer Initiative (PFI) between the FGN and the Kingdom of Morocco on balance of Trade;
  • Deployment of critical softwares (Price Rule Aggregation Management Software (PARMS) and Infrastructure Due Diligence systems) to ensure a seamless operations and delivery of GACN’s mandate;
  • Dispute free disbursement of gas supply revenues through the PARMS;
  • Proactive and increased engagement with the power sector to proffer solutions to the liquidity challenge of the sector. The payment Assurance Framework was recently developed by GACN to cushion the liquidity challenge and improve payment credibility in the sector;
  • Alternative securitization instrumentse. Bank Guarantee, Letter of Credit, Security deposit, pre-payment into the Escrow Account etc to support gas offtake;
  • Foremost licensed Shippers’ Agent under the Network Code;
  • Consistent periodic Stakeholders’ engagements aimed at actively interacting with the market and stimulating new gas development projects;
  • Use of standardized industry template agreements for the various market segments aimed at reducing bureaucratic approval processes and negotiation timelines;
  • Wholistic overview of the domestic market trends and local content.

GACN recognizes the unwavering support from stakeholders across the domestic gas value chain towards the advancement and delivery of its mandate in the past decade and will continue to work with stakeholders to explore opportunities and implement initiatives geared towards maximizing the economic value of Nigeria’s gas reserves while transitioning from an oil industry to an integrated oil and gas industry consistent with the FGN’s declaration of this decade as “the decade of gas”.

Articles  ·  Events
AJAOKUTA-KADUNA-KANO(AKK) GAS PIPELINE ECONOMIC BENEFITS IN NIGERIA

The Ajaokuta–Kaduna–Kano Natural Gas Pipeline (AKKP) is a pipeline planned to transport natural gas from Ajaokuta, in Kogi State to Kano in Kano State, through several states and urban centers, as part of the Trans Nigeria Gas Pipeline. Construction of the AKKP commenced in July 2020.

Location:

The pipeline originates in Ajaokuta and proceeds in a general northeasterly direction through Abuja Federal Territory, Kaduna, to end at Kano a total distance of approximately 614 kilometers.

Background:

This pipeline is intended to establish a connection between pipeline networks in the eastern, western and northern regions of Nigeria. The project strives to utilize the country’s abundant natural gas resources to sustainably supply gas to northern Nigeria. The development is expected to reduce the quantity of gas flared in the country’s oil fields and thus improve air quality. The Nigerian National Petroleum Corporation (NNPC), announced tenders for this project in July 2013. The Cabinet of Nigeria approved the project in December 2017.

THE ECONOMIC BENEFITS OF AKK GAS PIPELINE IN NIGERIA

These projects are fundamental to our desire to industrialize and energize the entrepreneurial spirit that is ever present in our population. Enumerating the benefits of the project, billed to be completed in two years,

  1. It will provide gas for generation of power and for gas-based industries which would facilitate the development of new industries.
  2. It will also ensure the revival of moribund industries along transit towns in Kogi State, Abuja (FCT), Niger State, Kaduna State and Kano State.
  3. It has significant job creation potential both direct and indirect, while fostering the development and utilization of local skills and manpower, technology transfer and promotion of local manufacturing.’
  4. Upon completion, the project would enable the injection of 2.2bscf/d of gas into the domestic market and facilitate additional power generation capacity of 3,600MW.

WHAT IS GACN’s IMPACT AS SOLE STRATEGIC GAS AGGREGATOR?

The GACN, in its ten years of operation, has helped to develop the Nigerian domestic gas market. The GACN introduced a standardized template Gas Sales Aggregation Agreement (GSAA) into the market. This template undergoes periodic review by stakeholders to reflect market realities. 85% of the current total domestic gas supply portfolio is now under GACN’s management. GACN has made disbursement of over N136billion gas payment dispute-free through the price aggregation management software. GACN ensured adequate supply to GBIs such as Indorama fertilizer plant and Dangote fertilizer plants. GACN is currently facilitating development of 3 mini Liquefied Natural Gas (LNG) projects for domestic consumption. GACN is also supporting direct gas supply to embedded and captive Independent Power Plants (IPPs) based on 100% payment performance.The volume of operationalized GSAAs as at 2020 stands at 858MMscfd. These are just a few key achievements amongst many.

 

Natural Gas Value Chain Infrastructure for Midstream and Downstream Sector

Sources:

  • https://www.researchgate.net/figure/Fig-A1-Natural-Gas-Value-Chain-Infrastructure-for-Midstream-and-Downstream-Sector_fig5_340638708
  • Read more at: https://www.vanguardngr.com/2020/06/benefits-of-akk-gas-pipeline-project-by-president-muhammadu-buhari/
  • https://en.wikipedia.org/wiki/Ajaokuta%E2%80%93Kaduna%E2%80%93Kano_Natural_Gas_Pipeline
Articles  ·  Events
NETWORK CODE FUNDAMENTALS

The Nigerian Gas Transportation Network Code (NGTNC) or Network Code for short, is a set of rules guiding the use of a gas transportation system; a contractual framework between the Network Operator and the Shippers that provides open and competitive access to gas transportation infrastructure. It was inaugurated by the Honourable Minister of State, Petroleum Resources; His Excellency Timipre Sylva on 10th February 2020 with actual “Go-Live” occurring on 10th August 2020. It enumerates the roles of the Agent, the Shipper among others.

KEY TERMS

Who is the Operator?

The Operator (Transporter) means the owner and/or operator of NGC’s Transportation System including the pipeline systems known as the Escravos-Lagos Pipeline System, the Oben–Ajaokuta pipeline system, the Obiafu/Obrikom-Oben pipeline system and the facilities used to provide services for the conveyance of gas in accordance with the terms of the Network Code. NGC is the licensed Operator.

Who is the Shipper?

The Shipper is any person or persons having reserved capacity on the Transportation System or any part thereof and licensed to carry on business as a gas Shipper. Any gas Buyer or Seller is termed a Shipper.

Who is the Agent?

An Agent under the NGTNC is any entity appointed by the Shippers (Shipper’s Agent) or the Operator (Operator’s Agent) or by both (Shipper’s & Operator’s Agent) to act in the Shipper’s or Operator’s stead respectively with regards to particular or all “Code Communications” on behalf of the principal (Shipper or Operator) with regards to the Network Code. Gas Aggregation Company Nigeria (GACN) Limited is currently licensed as the Network Agent.

 

What is Code Communication?

It is any communication to be given by a Shipper or the Operator (including any notification, application, nomination, confirmation, request, approval, acceptance, invoice or other notice to be given, made or submitted) under the Code.

Articles  ·  Events  ·  News Clip
GACN ACHIEVES YET ANOTHER POSITIVE RECOGNITION OF ITS CONTRIBUTION TO THE GAS SECTOR

Featured in Business Day Publication Celebrating 50 Major Indigenous oil Majors in Nigeria.

Businessday, Nigeria leading and influential business and financial daily, has published a landmark edition aimed at celebrating 50 major indigenous players in the Nation’s oil and gas industry.

Businessday stated that GACN was selected having closely monitored the company’s impressive corporate governance practices, its track record and reputation in the oil and gas sector, as well as its flexible adaption to emerging challenges and demands of the volatile oil and gas markets.

GACN management considers the honour a charge to do more and bring to bear GACN’s culture of excellence in all facets of its Gas sector initiatives and activities.

In a special report dated 1st April 2021 captioned “GACN at a Glance’’, The Newspaper highlighted GACN’s notable key achievements as well as new initiatives.

GACN Considers that this recognition is due to the consistent support of its stakeholders as well as key oil and Gas industry leaders such as The Honourable Minister of State for Petroleum H.E, Chief Timipre Sylva, the GMD NNPC, Mallam Mele Kyari, and the Nigerian Gas Association.

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CORPORATE SYNERGY BETWEEN GACN AND NGA

GACN currently is in a drive towards strengthening its corporate visibility and relevance. One of the most crucial aspect to any organization is its visibility. This will rightly position GACN before ideal audience and invariably provide adequate service as required. The choice of having corporate synergy with the Nigeria Gas Association (NGA) is one good step towards achieving this goal. GACN as a member, seeks for a better way to actively participate in the activities of the organization and consequently impact its existence and the gas industry at large. The NGA is the Apex organization representing the varied and numerous stakeholders in the gas sector within the Nigerian oil and gas industry. NGA anticipate and drive legislation and policies. Promote investment in the Nigerian gas sector. Strives to be the industry resource centre of choice and encourage best practices and acceptable standards. With the merits of NGA, having a corporate synergy will further strengthen the corporate visibility of GACN.

The Nigerian Gas Association (NGA) recently hosted their second edition of their industry multilogues. It is a two-day event which featured over 300 participants across the globe with 35 local and international speakers, on February 25 and 26, 2021.  The president of the Nigerian Gas Association Mrs Audrey Joe-Ezigbo in her welcome address espoused that the combination of how crude oil prices and falling crude oil export due to the pandemic has incapacitated Nigeria’s fiscal position, in order to cushion the economy and boost industrialisation the country must harness it vast domestic Gas potential with immediate effect.

The inauguration of the new executive committee was also conducted with Mr Ed Ubong as the new president of the organization. He emphasized and pledge that his administration will always engage and partner industry players in the gas chain and addressing its challenges and unfolding new ideas and initiatives.

GACN was honoured to host a memorable and important meeting on the 20th April 2021 with NGA to deliberate, discuss and address varied issues in the gas sector. After an insightful robust deliberation on gas commercialization and operationalization were new action plan was mapped out to further strengthen their collaborations to forge ahead. Pleasantries were exchanged and pictures were taken.

Articles  ·  Events
GACN Board confirms appointment of Company Secretary & Legal Adviser (CSLA) and Manager Corporate Services

At the 36th Board meeting which took place on 11th March 2021, the members of the Board of Directors of Gas Aggregation Company of Nigeria Limited (GACN) unanimously passed a resolution for the confirmation of the Acting CSLA and Corporate Services Manager.

Mrs. Tayo Rhodes-Vivour is hereby appointed as Company Secretary & Legal Advisor while. Mrs. Omosigho Egbon is appointed as the Manager, Corporate Services of GACN.

The Management and Staff of GACN felicitate with both Managers and wish them success.

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NSIA, OCP AFRICA, NNPC, MPN, AND GACN EXECUTE TERM SHEET FOR GAS SALE.

The execution of the Term Sheet for a Gas Sale and Aggregation Agreement (GSAA) between Nigerian National Petroleum Corporation (NNPC), Mobil Producing Nigeria Limited (MPN), NSIA Agriculture Investment Company Limited (NAIC), OCP Africa SA and Gas Aggregation Company of Nigeria (GACN) took place on 2nd March 2021.

The execution ceremony which took place at the Mohamed VI Polytechnic University (UM6P) in Benguerir, Morocco was graced by key stakeholders in the Nigerian and Moroccan Oil and Gas sector. In attendance were His Excellency, Chief Timipre Sylva, Honourable Minister of State for Petroleum Resources; Mostafa Terrab, Chairman and CEO of OCP; Mele Kyari, GMD NNPC; Engr Yusuf Usman, COO Upstream, NNPC; His Excellency, Mr. Udom Emmanuel, Executive Governor of Akwa Ibom State; Mr. Uche Orji, Managing Director NSIA; Engr. Simbi Wabote, Executive Secretary, Nigerian Content Development and Monitoring Board, amongst other notable dignitaries.

The objective of the Term Sheet is to outline the commercial principles for the long-term supply of gas by the Sellers (NNPC and MPN) to the Buyer (NAIC and OCP Africa SA) whose project is an Ammonia and Phosphate based fertilizer plant in Akwa Ibom State. This term Sheet is planned to be implemented in Q3 2021 through a Gas Sale and Aggregation Agreement (GSAA) which is to be executed by the parties.

The Managing Director and Chief Executive Officer of GACN; Mr. Olalekan Ogunleye stated in his speech that “GACN is resolutely committed to working collaboratively with all project participants to effectively facilitate the Gas Supply arrangement”.

In closing, the MD GACN charged all parties to work collectively to ensure that the GSAA is executed as planned and that the Multipurpose Industrial Platform project serves as a yardstick for future economic development cooperation between the Federal Republic of Nigeria and the Kingdom of Morocco.

The NSIA/OCP Multipurpose Industrial Platform project is a backward integration initiative, which builds on the successes of the Presidential Fertilizer Initiative (PFI) and other sovereign bilateral initiatives between the Federal Republic of Nigeria and the Kingdom of Morocco in terms of balance of trade.

 

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Federal Government of Nigeria prioritizes Diversification of the Economy through Gas Industrialization

In furtherance of the FGN’s drive towards ensuring that gas significantly contributes to the growth of the nation’s economy through gas to power generation, creation of new industries, and export of natural gas, the following infrastructure are currently being prioritized to support the FGN’s initiative:

Escravos – Lagos Pipeline System (ELPS 2)

The ELPS 2 is a 342km x 36” pipeline constructed to double the installed capacity of the existing ELPS from 1.1Bscf/d to 2.2Bscf/d.

The pipeline was constructed by Nigerian National Petroleum Corporation (NNPC) and spans from Oben node at PS1 in Delta State to Itoki at PS5 in Ogun State.

Ajaokuta–Kaduna–Kano (AKK) pipeline

The AKK pipeline is a proposed 614km x 48 pipeline. The AKK pipeline forms phase one of the 1,300Km long Trans-Nigeria Gas Pipeline Project (TNGP) – the single largest gas pipeline project scheduled to be executed in the history of Nigeria.

The AKK gas pipeline is planned to transport natural gas from Ajaokuta in Kogi State to Kano in Kano State. The pipeline will originate from Ajaokuta and pass through Abuja and Kaduna before ending at a terminal gas station in Kano. The AKK project would enable the injection of 3.5 Bscf/d into the domestic gas market upon completion.

The NNPC flagged off the construction of the pipeline in July 2020 and is expected to be completed in Q1 2023.

 Obiafu – Obrikom – Oben (OB3) pipeline

The OB3 pipeline (also called the East-West pipeline) is a proposed “127km x 48” pipeline with a projected capacity of 2Bscf/d. The pipeline will originate and run from the Obiafu-Obrikom gas plant near Omoku, Rivers State to the Oben node in Edo State.

The OB3 pipeline is currently being constructed by NNPC with an expected completion date of Q2 2021.


Pipeline Image by https://en.wikipedia.org/wiki/Pipeline_transport

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