Supply risks undermine Nigeria's gas-to-power crusade Report

Insight 08 July 2014

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Report summary

Wood Mackenzie forecasts that gas supply to the domestic market will grow by 50% over the next five years, peaking at 1,742 mmcfd in 2020. But this growth is being stunted by the slow pace of generation capacity additions and persistent interruptions to fuel supply caused by bunkering and vandalism. Until security of supply is properly addressed, Nigeria's expanding generation capacity will be heavily under-utilised.

Executive summary
Privatisation is well under way
Upstream supply is growing but at a slower rate
- Wood Mackenzie forecast of upstream supply to the domestic market: 2011 v 2014
- Selection of major infrastructure capacity additions for the domestic market until 2020
Huge supply risks cannot be ignored
- Major gas and power outages in 2013
- Schematic diagram of western grid including the Escravos-Lagos Pipeline System*
- *numbers indicate installed capacity
Inadequate fiscal terms could leave gas stranded
Gas price increases are being held back
- Schedule of gas prices for producers with a DSO
- DSO set by Government to meet its power sector supply aspiration by 2020
The domgas quid pro quo
- IOC-operated generation capacity