Gas Investments

Nigeria’s local gas opens investment opportunities

by with No Comment BusinessfinanceNews

The Federal Government of Nigeria is stepping up funding for important gas projects to promote the use of local commodities, opening up investment opportunities for pipeline construction, new industrial gas corridors and electricity projects. I am.

With increasing production from natural gas producers in a nearly bearish global market, the global reality of driving energy shifts to cleaner fuels could unleash Nigeria’s potential for gas for domestic use. It has become indispensable. In Nigeria, only 9 percent of the natural gas produced is used.

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“We need a revolution in our energy system,” said Timipre Silva, Minister of Petroleum Resources, in a speech at the Nigerian Gas Association’s (NGA) multi-logue, which was virtually organized on February 25 and 26. I believe. “

“And in that context, an important decision and new impact we can make now is to continue to expand the role and opportunities of natural gas for economic recovery,” Silva said.

According to Silva, the government’s perception that gas will continue to play an important role in economic development has led to the creation of a program to “grow the gas economy through the development of industrial and transport gas markets in a gas-to-electric juxtaposition.” It was. Initiative. “

As a result, the government has mandated the Nigerian National Petroleum Authority (NNPC) to increase its domestic gas usage from approximately 3 billion cubic feet (BCF) to 4.5 BCF, and has identified several projects to drive this result. ..

Mele Kyari, Group Managing Director of NNPC, said in a presentation at the event that the major projects to unlock 4.5 BCF gas for local use were the OB-3 pipeline (AKK pipeline) and Assa North. (Brass petrochemicals), stated through a representative. Especially ELP.

The $ 3.2 billion 40-inch x 614 km Ajaokuta-Kaduna-Kano (AKK) gas pipeline project, which is part of the Trans-Nigeria Gas Pipeline (TNGP), will move 2.2 billion cubic feet of gas per day from Kogi when completed. And you can cross Abuja. , Nigeria, Kaduna, Kano.

They are few, but the industry along this corridor has enough gas to drive growth. However, because the pipeline traverses a large, ungoverned region of Nigeria’s unstable northern region, there is an increased risk of pipeline instability.

The Obiafu-Obrikom-Oben gas pipeline, also known as the OB3 pipeline or East-West pipeline, is a natural gas pipeline that extends from the Obiafu-Obrikom gas plant in Delta to the Oben node in Edo.

The 48-inch, 127 km gas pipeline presents challenges, the latest being the original construction contractor, and Nestoil is technically unable to run the pipeline across the Niger River. The Chinese company China Petroleum Pipeline Engineering Corporation handles this and expects a completion date for the first quarter.

It is planned to supply gas projects in Asa North-Ohaji South, ANOH, one of the largest greenfield gas condensate development projects billed to produce 600 million standard cubic feet of gas per day. ..

If the project is successful, we will provide an alternative link to southwestern Nigeria whenever the critical Esclavos Lagos pipeline system fails.

Brass Fertilizer and Petrochemical Company Limited (BFPCL) is another high priority project. There are two trains producing 5,000 tonnes / day (MTPD) of methanol and 500 million standard cubic feet / day (MMscf / d) gas treatment to extract condensate from natural gas before supplying the remaining lean gas. Includes plant. Methanol plant.

It also includes gas manifolds and pipelines to connect gas processing plants to gas fields and export facilities.

“We are aiming to set up two gas hubs, one in Oven and the other in Brass,” said the NNPC boss.

The NNPC boss further said the gas hub “will make an announcement about gas prices, creating a situation where the industry will begin to mention gas prices in Nigeria.”

Other projects, such as Shell-led AssaNorth and the AssaNorthGas processing company that approved $ 650 million in funding, are also important projects.

“All projections show that 60-70% of the gas that forms the basis of 4.5 BCF comes from electricity. Therefore, broken power lines so that you can make money from your investment in gas. It needs to be repaired and improved downstream collection, “said NNPC.

To this end, the state-owned oil company is considering establishing an additional 5,000 mw of electricity in its network and is currently working with stakeholders to resolve the issue so that the investment can be realized. Said.

However, operators say gas pricing remains controversial. “Our investment has affordable gas prices. We need a price that works,” said Roger Brown, CEO of indigenous oil company Seplat.

Osagie Okunbor, managing director of SPDC and country chair of Nigeria’s Shell Companies (SCiN), said Nigeria’s regulatory approach to gas should not focus too much on renting like oil. He warned that a spurring financial and regulatory environment should be created. Investing in gas projects has a beneficial effect on the economy.

SOURCE: BUSINESS DAY

LNG vessel

Nigeria gasps for new LNG investments.

by with No Comment Businessfinance

Stakeholders have urged the Federal Government and others to invest more in the Liquefied Natural Gas, LNG, as it becomes obvious that other nations have left the nation behind with its 22 million tonnes, MT, yearly capacity.

Investigation by Energy Vanguard showed that this is based on the awareness that the expansion of the nation’s output to 30MT yearly through the ongoing Train 7 would not make much difference in the global ranking of Nigeria.

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Available data showed that Australia, Qatar and Malaysia are currently the world’s top three exporters with 77.5MT, 77.MT and 24MT respectively.

These are followed by Nigeria, Indonesia and Algeria, with 22MT, 16.6MT and 11.5MT respectively. The nations are further followed by Russia, Trinidad & Tobago, Oman and Papua New Guinea with 10.8MT, 10MT, 8.1MT, and 7.1MT respectively.

However, in its presentation at the just-concluded 12th biennial International Conference themed, “Powering Forward: Enabling Nigeria’s Industrialisation via Gas” obtained by Energy Vanguard, the Managing Director, Nigeria LNG Limited, Mr. Tony Attah, MD/CEO, stated: “Nigeria LNG, the biggest LNG plant in Africa produces 22 million tonnes despite our 200 TCF, and that’s partly why we are saying it’s really a time to take advantage of this resource and start to monetize it.”

Energy Transition He said: “As the world is transiting, the risk is incumbent on us that we potentially could get to a point where even the gas, just like oil, will not be as relevant in the future because if technology, which I believe is the biggest disruption takes centre stage to make hydrogen more available and easier to access, then we have a big issue.

“As we say, there is still coal in Enugu, for those who are from the 50s, you can imagine the biggest economy at the time was underpinned by coal. “The locomotives, everything was about coal, power was about coal.

But today no one talks about Enugu with respect to energy. “So energy is in full transition. And we believe it’s time to monetise Nigeria’s gas today. We just touched on a quick case study of Qatar.

“Someone mentioned Qatar already from a proficient country to a gas giant, and it took just 10 years, which is why we as Nigeria LNG firmly believe in the conversation and the narrative about the declaration of the decade of gas. We believe it is possible.” Case of Qatar Speaking further, he said: “If you look at Qatar from 1995. When they really went into gas development, we were just two years behind Qatar.

“So Qatar’s first gas LNG was in 1997. Nigeria’s first LNG was in 1999, just two years behind. But then within 10 years because of the deliberateness of the government and focus on gas, they have gone to 77 million tonnes and we are at best 22 million tonnes. ““We’ve made major in-roads with the support of the Minister of State for Petroleum, the Group Managing Director of NNPC, the Executive Secretary of NCDMB, and our shareholders NNPC, Shell, Total, and Eni, taking the ultimate decision for Train-7.

“But Train 7 is only going to add about eight million tonnes to take us to 30 million tonnes and just recently to establish Qatar’s dominance and deliberateness and focus on gas, they have taken an FID for 30million tonnes. “We celebrated Train-7 on the back of eight million tonnes to take us to 30 million.

“They have taken FID for 30 million tonnes. Essentially, our overall existence as a country is their increment. And for me, that is about how deliberate you can be. Look at how much they have made it count in Qatar.

But for Nigeria LNG, we continue to deliver value to the nation.” In an interview with Energy Vanguard, Victoria Ibezim-Ohaeri, Executive Director, Spaces for Change, said: “As a major gas destination, Nigeria deserves to stake more of its resources in the development of its LNG in order to get much value from natural gas.

“As the world considers shifting from dependence on one form of energy to another, we should consider making massive investment in the sector, apparently because of much benefit the nation is currently getting from LNG.”

Report Nevertheless, in a document obtained from its website, the NLNG, stated: “NLNG has over the years paid dividends of about USD18 billion to the Federal Government of Nigeria courtesy of its shareholding in the company, via Nigerian National Petroleum Corporation, NNPC.

As a good corporate citizen, NLNG also contributes to national wealth and the economic wellbeing of states in which it operates, by paying all applicable taxes and tariffs. The company has paid about USD9 billion in taxes to the Federal Government of Nigeria.

“Payment to the Federal Government of Nigeria via its shareholding in Nigerian National Petroleum Corporation, NNPC, for feedgas from inception till date is about USD15 billion.

With its plant construction, the company generated considerable Foreign Direct Investment, FDI, for the country. NLNG has assets (i.e. property, plant and equipment) worth about USD17.5 billion with 51 per cent stake by international oil companies and 49 per cent belonging to the country through the Nigerian National Petroleum Corporation, NNPC.” The report, added:

“The Company, since 2008, has contributed about four per cent of Nigeria’s annual Gross Domestic Product, GDP. With rebasing of the GDP in 2014, NLNG’s contribution to the GDP is estimated at about one per cent. NLNG provided more than 12,000 jobs at the peak of construction of each plant. Overall, the major sub-contractors employed over 18,000 Nigerians in technical jobs in the Base Project (Trains 1 and 2). Through each Nigerian Content plan for its contracts, NLNG has promoted the development and employment of Nigerian manpower.

Over 12,000 direct jobs will be generated during the construction phase of Train 7.” Time, running out However, time seems to be running out as some emerging oil and gas nations have also ventured into commercial NLG production. Take Mozambique as an example.

In its latest report, African Oil and Gas, stated: “Mozambique at Forefront of Global Gas Development. “Driven by new discoveries and progressive gas-focused policies, Africa’s LNG consumption and production is set to become one of the fastest-growing sub-sectors globally through 2040.”

Read more at: Vanguard News Nigeria

Investing During Recession

Investing During a Recession

by with No Comment BusinessOpinionssme tips

Recession has in the last few years become something of a buzz word in Nigeria to describe the harsh economic conditions in the country and its resultant effect on the income, spending power and businesses of the people.

However, by definition, a recession happens when a country’s GDP falls in two consecutive quarters, while the Gross Domestic Product (GDP) simply means the measure of goods and services produced in a country over a period of time.

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Last year, the economy contracted by 3.62 percent in the third quarter of 2020, indicating that two consecutive quarters of negative growth had been recorded in 2020 following the previous decline by 6.1 percent in the second quarter.

Officially, this meant that Nigeria’s economy slipped into recession and for the second time in four years as oil prices plunged in the midst of the COVID-19 pandemic.

Recessions are usually characterized by falling incomes, weakened sales and production as well as a drop in the confidence levels of investors. Consequently, this leads to an aversion for risk and often a tendency to err on the side of safety.

The interesting fact, however, remains that recessions often give way to recoveries soon after. In the light of this, with the right strategy, a recession might not necessarily be a bad time to invest.

These few tips will be useful in helping you create your personal investment strategy.

Avoid Panic One big mistake investors make in times of recession is to make panic-induced decisions and follow an inclination to liquidate investments in favour of cash. This could, however, mean that you box yourself into a “corner” which could eventually produce hefty losses once the economy begins to recover. This is especially for people who have a stock-based investment portfolio.

Also, patiently wait to get dividends for your existing investments and resist the urge to sell in panic. Carefully Inject Funds into Investments When a market is fraught with volatility and investor fear, it can be extremely difficult to time trades perfectly and properly predict when prices are likely to rise or fall.

The way to work around this is to find a personal saving pattern that works for you and then carefully identify investments that appear worthwhile to inject your saved resources into.

This can help you save money and also, significantly increases your purchasing power as prices are usually low at these times.

It may also be a good time to take advantage of low prices and get bargain deals especially in industries that have been hard hit by the recession but have clear potential to bounce back strongly.

Take a Peek In taking on new investments in this period, especially with direct investment like shares, always take a peek into the financial records as well as the business and operational models of the companies you are considering for investment.

Industries and companies that cater to basic human survival needs are a good bet in this regard because they can often expect to experience minimal upheavals even in a recession.

There is Nothing Wrong with Being Safe Investing in safety nets such as bonds and mineral resources such as gold can be a great way to store up value, as their performance is often unaffected by market forces.

This can help you diversify your portfolio properly and ensure you are not entirely reliant on how the stock market pans out. I leave you with the words of the American businessman, MichealNesmith “Behind every dark cloud, there is usually rain”.

SOURCE: VANGUARD

Investment Risk Capital Market

Capital market investment: Managing Risks…

by with No Comment Businessfinance

The capital market is, generally, regarded as a safe haven for investment. There, your money works for you.

The market is a setting for income without stress.

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Smart and daring speculators can make fortunes there and can also lose a fortune through poor judgement.

Despite its attractiveness, the capital market is volatile.

In fact, volatility in price of securities is the hallmark of every capital market.

Increased risk can emanate from increased volatility.

Everyday, stock prices go up and down in reaction to any number of issues involving business, the socioeconomic and geopolitical events.

The field of behavioral science has contributed an important element to the risk equation, demonstrating asymmetry between how investors view gains and losses.

Investors usually put roughly twice the weight on the pain associated with loss than the good feelings associated with a profit.

Every investor wants to play safe with his investments.

Often, investors want to know just how much the value of an asset may deviate from it’s expected outcome, and also how bad things may look way down on the negative side.

Value-at-Risk (VaR) attempts to provide an answer to this question.

The idea behind VaR is to quantify how large a loss in investment could be with a given level of confidence over a defined period.

Due to the high volatility and frequent downturns in the capital market, uncertainties characterize the predictability of returns on investment.

As a result of uncertainty, it is extremely difficult to predict the future price of a security and by extension, direction of the capital market.

Uncertainty and risk are synonyms but they are not quite the same. Uncertainty must be taken in a sense radically distinct from the familiar notion of risk, from which it has never really been properly separated.

The term “Risk” as loosely used in everyday speech and in economic discussion, really covers two things which functionally at least in their causal relations to the phenomenon of investment, are categorically different.

Uncertainty is the lack of complete certainty. It is a situation where the future outcome cannot be predicted with any confidence from knowledge of past or existing events.

Uncertainty presents more than one possibility whereby the true outcome or result is unknown. Uncertainty is immeasurable ie, not possible to calculate whereas, risk is a state of uncertainty where some of the possibilities involve a loss, catastrophe or other undesirable outcome.

It is a set of possibilities each with quantified probabilities and quantified losses. One may have uncertainty without risk but not risk without uncertainty. We can be uncertain about the winner of a contest but unless we have some personal stake in it, we have no risk.

If we bet money on the outcome of the contest, then we have a risk. Consequently, the measure of uncertainty refers only to the probabilities assigned to outcomes while the measure of risk requires both probabilities for outcomes and losses quantified for outcomes. Uncertainty presents both risk and opportunity, eroding or enhancing value.

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