June 5 th 2013 NOG Tech Lagos, Nigeria Update on the Nigerian Gas Master-plan Dr. David Ige Group Executive Director, Gas & Power NNPC
Outline Overview of the Nigerian Gas Sector Our Scorecard Gas Industrialization Investment Opportunities Conclusion 2
Reserves (Billion) Barrels Overview of the Nigerian Oil & Gas Industry - Nigerian Oil & Gas Reserves Overview Nigeria s abundant oil and gas reserves base creates a robust platform for investment opportunities. 40 Nigeria s Crude Oil Reserves (1980-2010) 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) 3
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
6 Our Strategic Aspiration for Natural Gas STRATEGIC THEMES OF GAS MASTER PLAN GAS TO POWER Deliver Gas for at least threefold increase in generation capacity by 2015 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 on President s 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 Nigeria s 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
Unprecedented Growth in Gas Sector 868,000BOE 926,000BOE The strategy paves way for an unprecedented growth potentially making Nigeria s gas sector number 5 in Africa in terms of BOE. FGN s policy thrust through the Gas Master-plan has been to enable this growth 7
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 Scalable Gas Infrastructure Blueprint Bankable commercial framework reforms in pricing and revenue securitization to enable sustainable investment in gas supply 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 5 Steady progress has been made in delivering the critical pipeline infrastructure. This will address many of the gas deliverability challenges 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 2 5 3 1 1 Oben Geregu 36 x 136km; from Oben to Geregu Project completed in Nov 11 Addresses supply deliverability to Geregu power plant and future expansions 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 4 Obiafu/Obrikom - Oben (OB3) 48 x 127km; Contract was awarded by FEC in April 2012 Detailed engineering almost completed Completion Date Early 2015 3 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 Planned gas supply 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 - Africa s 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
26 The Domestic Supply Obligation Policy The gas supply to underpin agenda is from the Domestic Gas supply Obligation (DSO)
Domestic Gas Price Transition 27
Gas Pipeline Infrastructure Blueprint - Aggressive Expansion in Progress 28
Ogidigben Gas Based Industrial Park - Africa s Largest Gas City
Gas Pipeline Investment Opportunities Jebba Ibadan Geregu NIPP Ajaokuta Olorunshogo ELPS 2 Omotosho Oben Egbin ELPS 1 Obiafu/Obrikom Aba Industries Erha 2 1 3 Odidi Ogidigbe Industrial City Forcados Yorki Cawthorne Channel GTS 1 Obite 225mmscfd Indorama Alakiri 100mmscfd Alaoji NIPP Imo River Uquo Unicem Cement Calabar NIPP Alscon Bonga FPSO Ibom Power 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 NNPC FGN Annual Appropriation 3rd Party Equity Participation FGN Eurobond Debt EPC Contractor / Contractor Financing ECA 3rd Party Debt
Investment Opportunities FINANCIAL SERVICES 7 1 GAS TRANSMISSION PIPELINES PIPE MILLING AND FABRICATION YARDS 6 $16 Billion Investment 2 UPSTREAM GAS DEVELOPMENT Opportunity OGIDIGBEN FTZ INFRASTRUCTURE, PORT INFRASTRUCTURE & REAL ESTATE DEVELOPMENT 5 4 3 GAS PROCESSING FACILITY / GAS BASED MANUFACTURING INDUSTRIES LNG & LPG PLANTS 34