Olufola Wusu

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Oh how I wish my Car would run on gas.

It’s being years and I hope my dream comes to pass.

Then I heard one or two Dangote trucks had switched to “dual”

I am not a dreamer, I am just being factual.

Now it seems my dream has begun to gather mass.

Olufola Wusu Esq. © 2013

Gas has floated into the energy equation in Nigeria, as Sagas Energy Company Limited has started the conversion of the conversion of Dangote’s heavy-duty trucks to enable them use gas as fuel. It was reported that 200(two hundred) of the 5,000(five thousand) trucks belonging to Dantrans, of the Dangote group have been successfully converted to run on both gas and diesel.

A Memorandum of Understanding (MoU) was signed three months ago between Sagas and the NGC. Under the said MOU, the Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC) is to exclusively supply Sagas Compressed natural Gas (CNG) for 20 years while Sagas converts PMS and diesel engine vehicles to adapt the engines to use.

Oil And Gas Contracts Are Stories…

In the Dangote/Sangas paradigm, Gas Contracts are not different from “novels” in the sense that they tell a story about the agreement that the private parties entered into with an energy company within the ambits of applicable laws. The regulatory framework for the use of natural gas is probably still evolving so model contracts might lie somewhere in the future.

PIB and Gas Utilization

The PIB if passed into law will probably continue with the use of DSO’S. Before the passage of the PIB government has tried to promote the utilization of LPG and CNG as cleaner alternatives to diesel and petrol.

PIB And The Need for Fiscal Terms…

Fiscal terms in any oil and gas contract enumerate the objectives of the host government, guide and help ensure profitability for all the parties involved from the host government to the IOC’S.

Domestic Gas Supply Obligations

In an attempt to jump start the Nigeria Domestic Gas Market, the Federal Government of Nigeria (FGN) introduced the DSO volumes through its National Gas Supply & Pricing Policy 2008. The National Gas Supply & Pricing Policy 2008 mandates all gas (Associated Gas & Non Associated Gas) producers to dedicate a specific portion of their gas reserves and production for supply to the Nigerian domestic market. These DSO Volumes are assigned by the FGN through the DPR.

Are “Domestic Gas Supply Obligations and Pricing Policies” sufficient?

The Dangote/Sagas paradigm has shown the inadequacy of DSO’S alone. For effective gas utilization we need demand, we already have that, long term supply, a distribution network (pipeline, trucks and perhaps ships), technical ability for pro gas conversion, and the legal regulatory frame work that should include the DSO, incentive and model contracts covering all the facets of the proposed Gas revolution.

Dangote Paradigm: Fuel-Intensive Fleets Have Been Using Natural Gas For Years.

Fuel-intensive fleets travel far and wide each day and have been using natural gas for years. Examples include taxicabs, transit (like the ones in Benin) and school buses, airport shuttles, construction vehicles, garbage trucks, delivery trucks, keke napep and public works vehicles. Large volume of vehicles makes it more economical to convert vehicles or to purchase them outright. Fleet vehicles are also centrally maintained, making the refueling process convenient and reliable.

Gas to Liquids Technology in Gas

Research and operations in the gas industry have thrown up “gas to liquids” as a possible model for the use of renewable energy sources. Research has thrown up new ideas, procedures, software and equipment that have succeeded in turning gas into a state (compressed/liquid) in which it can be easily stored, transported and used.

Long-Haul Trucks And Buses Use LNG Too…

In some countries long-haul trucks and buses run on another form of natural gas called liquefied natural gas, or LNG. LNG is made by refrigerating natural gas to -260°F, condensing it into a liquid which is much denser with more potential energy for the amount of space it takes up.

Gas distribution is a Complex Mix…

LPG and CNG distribution might involve distribution by pipeline, trucks and if need be ships. The major goal is uninterrupted supply of cleaner fuels.

Where can I get a Natural Gas Vehicle?

Two car companies leading the way in NGV design and engineering are Honda and DaimlerChrysler.

Is The Emergence Of Shale Gas A Game Changer?

The age long reliance the United States and other Western nations have placed on Africa and the Middle East for Oil and Gas is about to be threatened OR PERHAPS HAS ENDED with the shift to shale gas by these countries. It’s time to up our game, we need an energy policy and fast at that! The Group Managing Director of the NNPC, Engr. Andrew Yakubu, was quoted as having said that “There is no doubt that shale gas has come and is with us, we also know that it is posing a challenge to the oil and gas activities in Nigeria. With the coming up of shale gas there has been a drop of pipeline imports from 16 to 12 per cent while shale gas has grown from 8 to 32 per cent, and LNG import has dropped from 3 to 1 per cent, which is mainly Nigerian LNG.” Reports have it that the United States plans to start export of LNG by 2015.

What Is Shale Gas and Why Is It Important?

Shale gas refers to natural gas that is trapped within shale formations. These are fine-grained sedimentary rocks that can be rich resources of petroleum and natural gas. Sedimentary rocks are rocks formed by the accumulation of sediments at the Earth’s surface and within bodies of water.

Shale Gas and Hydraulic Fracturing

Over the past decade, the combination of horizontal drilling and hydraulic fracturing has allowed access to large volumes of shale gas that were previously uneconomical to produce. The production of natural gas from shale formations has rejuvenated the natural gas industry in the United States and other western countries. (Courtesy of EIA)

Hydraulic Fracturing in Nigeria?

The debate over hydraulic fracturing should commence sometime soon and should not be silenced, but it should remain based on fact, it should be focused on the protection that is already in place and what actually is being done to increase that protection or it will have failed to serve the public interest.

Conclusion

After years of not really talking about it, Nigeria needs to control its own energy future, (exporting all we produce is far from effective control). We need to produce and refine more oil and gas at home. We need to double the distance our cars will go on a litre of petrol while shifting our focus to renewable energy, we need to double/increase the amount of renewable energy we generate from the elements. The world is shifting its focus to renewable energy sources; we would do well to restructure our energy industry to begin to take advantage of the season of plenty by preparing and providing for future generations of Nigerians.

Olufola Wusu is a Commercial, Oil and Gas and I.P. Lawyer based in Lagos

Olufola Wusu Esq. © 2013

Olufola Wusu is noted for his “dynamic practice” and “commercial acumen”. He is praised for his “first-rate skills” in assisting clients…