Shell Petroleum Development Company (SPDC) has revealed that only 25% of the Nigeria’s gas reserves are being utilized, even though the country has proven reserves of 181 trillion standard cubic feet.

According to the Managing Director of Shell Petroleum Development Company (SPDC) and Country Chair of Shell Companies in Nigeria, Osagie Okunbor (photo), this is as a result of some of the problems facing the sector’s development. This problems includes, gas producers debts, poor gas infrastructures, inadequate funding and lack of a favorable business environment.

He added that though as at 2015, Nigeria had proven gas reserves of 181Tscf, the resource is being underutilized as output being developed or produced from gas acreages is currently at about 46tscf, just a quarter of available volume.

Nigeria as a country that has the largest proven gas reserves in Africa, has a very low level of exploitation when compared to some other African nations that have less reserves.

Okunbor stated that the solution to the challenge is to repay outstanding gas invoice debts because without the guarantee of a repayment of gas invoice debts, investors will be unwilling to promise further investments to grow domestic gas production.

“It is vital to settle outstanding debts and establish bankable credit support facilities for future gas sales. Developing adequate gas infrastructure is critical. Infrastructure remains inadequate along the value chain. Pipelines to deliver gas to off-takers for power generation and other users are important. Therefore, there is need to attract investment in infrastructure development, unbundle the Nigeria Gas Company (NGC) into separate pipeline and gas marketing companies, and complete the critical National Integrated Power Project (NIPP) transmission lines,” he told the Nation.

He added that guaranteeing sufficient funding is essential as unsettled joint venture financing issues reduces gas development and production.

Anita Fatunji