24 February 2015, Lagos – The Nigerian National Petroleum Corporation, NNPC, yesterday, stated that Nigeria’s domestic gas demand will rise to about 10 billion cubic feet, bcf, per day within the next five years, from current demand of about two billion cubic feet per day.
Group Managing Director of the NNPC, Mr. Joseph Dawha, was quoted in a statement by the Corporation as saying that the increased demand will be driven by the growth in the country’s power sector.
According to him, rising demand from the power sector an industry is fueling growth in the domestic sector, with demand set to hit five bcf per day in 2017, before rising to 10 bcf per day by 2020. To meet this demand, Dawha, however, stated that the NNPC and the Federal Government have embarked on a very aggressive implementation of the Gas Master Plan to meet the astronomical increase in gas demand.
According to him, over 500 kilometers of pipelines have been laid and many more kilometres planned in the next two to three years. The Federal Government had a couple of weeks ago, signed an agreement with eight oil companies for the supply of natural gas to 10 power plants in the country, with the aim of boosting power supply across the country. Meanwhile, the values of Nigeria crude oil, according to trading sources, increased as higher refining margins supported by healthy light end and middle distillate cracks boosted the West African crude market.
Traders stated that the main reason for the jump in prices for Agbami and Akpo was due to buoyant demand caused by widening naphtha crack spreads. Market sources, according to Platts, said activity picked up about two weeks ago once the March term allocations were finalised modestly in the past week and demand for the light sweet grades like Akpo and Agbami was very strong initially.
Qua Iboe was assessed at Dated Brent plus $1.30 per barrel, the highest since November 20, 2014, Platts data showed. Traders also said recent March stems were traded close to or higher than Dated Brent plus $1.50 per barrel, adding that differentials for Nigerian light sweet crude grades such as Akpo and Agbami had risen by more than $1.30 per barrel from previous trades in February. Market sources told Platts that Agbami for March had traded between Dated Brent minus $0.70/b and minus $0.40 per barrel, or $1.50 per barrel above the level of the February programme.
*Michael Eboh – Vanguard