Nigeria’s gas export to U.S. drops to zero



• 2,000 indigenous firms attend Houston conference
• Kachikwu urges carbon initiative, blames suspension of oil search in Chad Basin on insurgency

Nigeria’s earnings from the petroleum industry continue to be hard-hit as the United States (U.S.) Liquefied Natural Gas (LNG) import from Africa’s most populous country fell from 20.3 million cubic feet in June 2007 to zero as of February this year.

And the quest to boost revenue in the search for oil in the Chad basin is being hobbled by the activities of insurgents in the Northeastern part of the country, according to the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu.

Meanwhile, more than 2,000 Nigerian companies and chief executive officers are attending the Offshore Technology Conference (OtC) in Houston, United States.

Also, (NNPC) has expressed its readiness to take practical steps towards ensuring low carbon emissions in its operations in line with the global Paris agreement of December 2015.

The U.S. LNG import started dropping since 2008 when it fell to an average of 3.1 million cubic feet. The situation became worse in 2011 when Washington imported only 2.3 million cubic feet before falling totally to zero level.

The U.S. Energy Information Administration (EIA), which made this disclosure yesterday in a statement, said it now gets majority of LNG from Mexico, Canada and Trinidad.

The EIA said in a statement yesterday that its natural gas net imports fell to 2.6 billion cubic feet per day (Bcfpd) in 2015, continuing a decline that began in 2007, when net imports of natural gas exceeded 10 Bcfpd.

According to EIA, while both U.S. natural gas consumption and production have increased in recent years, natural gas production has grown slightly faster, resulting in a decline in net imports. Increasing domestic production of natural gas has reduced U.S. reliance on imported natural gas and kept U.S. natural gas prices relatively low.

It stated: “Most U.S. imports of natural gas come by pipeline from Canada. A small and declining amount of imported liquefied natural gas (LNG) comes mainly from Trinidad. Most U.S. exports of natural gas are sent by pipeline to Mexico and Canada. The United States also exported LNG and compressed natural gas to several countries, but these volumes were relatively minimal in 2015.

“In recent years, increasing production from shale in the United States has resulted in an increase in U.S. natural gas exports. Since 2012, the natural gas pipeline industry has added 3.4 Bcfpd and 0.2 Bcfpd of export capacity to Mexico and Canada, respectively. As a result, U.S. natural gas exports to Mexico grew from 1.3 Bcfpd in 2011 to 2.9 Bcfpd in 2015. U.S. natural gas net imports from Canada have remained relatively stable since 2011”.

Speaking with The Guardian yesterday, the Chairman of Petroleum Technology Association of Nigeria (PETAN), Maxi Bank Anthony Okoroafor, said that “given the current challenging price environment, Nigeria’s indigenous oil companies are willing to make necessary sacrifice to sustain our industry.”

He added that more than 4000 firms will be exhibiting in this years’ OTC.

Okoroafor stated: “This year’s OTC is unique, in the sense that, it is holding at a period when the world is floundering under the weight of low oil price. More worrisome perhaps should be the engendered glut in the market, which has shown no sign of decreasing in the immediate future.

“This year’s theme – ‘The Nigerian Oil & Gas Industry: Current Realities, exciting Opportunities’ thus provides Nigeria with the unique opportunity of maximizing benefits through adoption of low cost technology in asset management, as well as seeking industry collaboration with buyers, suppliers and vendors with operators in the oil and gas Industry. With increasing cost pressures and tightened access to capital with the attendant cut backs in exploration and deferral of projects, this is a good time to look critically to our oil & gas industry. It is really a time for financial, portfolio and operational resilience.”

On the search for oil in the Chad Basin, Kachikwu who is also Nigeria’s minister of State for Petroleum Resources, said eight phases, out of the planned 12 phase project, to cover 3, 550 have been acquired by the date of suspension of operation on November 24, 2014.

However, he underlined the commitment of the Federal Government and the NNPC to explore oil and gas in the inland areas especially Chad Basin and the Benue Trough is unwavering and is on the front burner.

Specifically, he stated that the NNPC through its Frontier Exploration Services and Renewable Energy Division (FESRED) had progressed reasonably with seismic acquisition activities in the Chad Basin frontier area up until insurgency necessitated the suspension of operations there.

“A total of 1, 962 have been acquired and processed, interpretation is currently on-going at about 90 per cent completion, and drilling activities will commence by the last quarter of 2016,” he remarked.

He explained that the seismic activities were carried out with due regard to environmental protection and in accordance with international standards and best practices and was being handled by Integrated Data Services Limited (NNPC subsidiary) and BGP, a subsidiary of China National Petroleum Corporation.

He further explained that the exploration was aimed at increasing the nation’s oil and gas reserves, add value to the hydrocarbon potentials of the Nigerian inland basin, provide investment opportunities, boost the economy as well as create millions of new jobs.

“The decision to diversify our business portfolio is about all of us and about the future of our dear country, the vision is clear, and we are determined not to fail,’’ Kachikwu stated.

According to Kachikwu, the time has come for all hands to be on deck to combat climate change and unleash actions and investment towards low carbon emissions, resilient and sustainable future as was agreed by 195 nations in Paris last year.

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