Natural Gas Commercialization Solutions

Fundery Africa is a Business Development Catalyst that provides a wide range of Commercial, Business & Project Development, Financial solutions to clients and investors in the African energy, finance and technology sectors in Africa. Our gas commercialization unit is a tight-knit digitally-agile team of subject matter experts & specialists across the industry linking energy producers to willing commercial end-user markets. Our experienced and innovative teams have a consistent track record of engineering strategies and vertically integrated Commercial-Financial- Technical Solutions for the dynamic West African energy value chain.

Natural Gas Utilization in Nigeria

Nigeria is the 2nd biggest producer of gas in Africa. Nigeria’s robust demographic and macroeconomic fundamentals support the growth outlook for gas demand due to its large emerging population with a potential household LPG consumption estimated at 3.4million MT per annum. Nigeria’s has the largest proven gas reserves in Africa, estimated to be more than 202 Trillion standard cubic feet (Tcf). While gas flaring is still prevalent at 11% of production, there are concerted efforts by regulators to
reduce this by focusing on stimulating domestic demand, levying flaring penalties, mandated domestic gas supply obligation and support for domestic gas-to-power infrastructure. Established net gas exporter with robust export infrastructure– the NLNG alone processes 3.5Bcf per
day of gas, the majority of which is exported to European, North American and Asian markets. Domestic supply market in its infancy but rapidly developing. Nigeria has the lowest gas consumption per capita in West Africa (less than 1.0kg per capita) The Federal Government’s drive to end gas flaring through the National Gas Policy (2017) and the Gas flare regulations introduced in 2018 will create a potential market for at least 45 new gas projects coming onstream after 2020. With the recent divestment exercises of the International Oil Companies (IOCs) majors, a sizeable
part of Nigeria’s gas resource is beginning to be held by the Indigenous Consortiums.

Source: DPR, NGEP, Argus

Out of Nigeria’s natural gas production of c.a. 7.5 Bscfd, approx. 43% of this is exported to Europe and America mainly through the Nigeria Liquefied Natural Gas Company Ltd (NLNG) and a smaller volume to the West Coast of Africa through the West African Gas Pipeline WAGP 13% is used domestically for power generation and industries, power generation consumes of a huge chunk of the domestic supply. 34% is used upstream for gas re-injection and other operational uses, while about 10% is flared. On infrastructure, with a landmass of over 920,000 sq. km, Nigeria has only 4,000 km of gas pipelines, this is grossly inadequate to serve the vast
population of over 170 million people. Nigeria’s current electricity generation mix is around 85% Thermal, mainly gas-fired and 15% by
Hydro. The Nigeria government estimates that the economy loses about N29.3bn /yr, due to lack of adequate electricity. Correspondingly, large investments are also required in the other parts of the electricity
infrastructure chain – transmission and distribution networks including metering. The large-scale power plant projects are very capital intensive requiring several billions of dollars of investment, very rigorous financing requirements, major project delivery expertise, suite of regulatory processes, thereby making it difficult to deliver such projects.

It is estimated that the infrastructure gap in the gas sector requires about $10bln over the next 2-4 yrs. (Sources: NGEP, DPR)

Market Opportunity for Nigerian Gas

Gas Commercialization Value Chain

Gas Commercialization Project Structure

SPV Financing Structure

Gas Commercialization Scope of Services

Commercial Strategy Formulation

  • Identification of upstream and midstream key issues and gas monetization alternatives
  • Natural gas Exploration and Production (E & P) and NG strategy (formulation, business development, Early Production Plan)
  • Development of energy scenarios based on current trends
  • Identification of strategic issues, options and ensuing actions
  • Portfolio ranking and capital allocation aligned with strategy

Gas Project Advisory Services

  • Provision of a wide range of quantitative and qualitative decision support services for opportunity identification, feasibility assessment, project governance, strategy formulation, action plans, project team and senior leadership decision making
  • Technical advisory services for project financing
  • Peer review of energy projects, and recommended actions to deliver success
  • Facilitation of workshops and peer reviews

Gas Sales & Purchase Contract Development

  • Market and industry intelligence – identification of target market, key buyers or suppliers, price benchmarks, netback analysis, alternatives buyers and sellers where applicable
  • Negotiation of Gas Sales Agreements (GSAs), NGL cargo availability, Memoranda of Understanding (MOUs) and Sale and Purchase Agreements (SPAs)
  • Economic evaluation of options, outcomes, and recommendations

Domestic Supply Chain Networks- LNG, LPG, CNG

  • Upstream Gas Projects: We source raw natural gas from renowned upstream and midstream producers with strict composition quality standards for CNG, LNG and LPG
  • Gas Offtake: We provide a gas commercialization/offtake outlet for a vast network of gas processing, liquefaction and bulk storage assets operated by renowned midstream and downstream stakeholders such as NIPCO, PowerGas, Banner Energy, Falcon Kinetics, Puma Energy, Greenville LNG, Gas Aggregation Company of Nigeria (GACN), Nigeria Gas Company (NGC) and new entrants into the domestic midstream market.
  • Regulatory Alignment: Nigeria Gas Policy 2017, Nigeria Gas Flare Regulations 2018, Nigeria Gas Flare Commercialization Programme (NGFCP), Nigeria Gas Expansion Programme (NGEP) N250bn fund, Nigeria Gas Development Fund (NGDF) $2 Billion (NCDMB), Nigeria Gas Transportation Network Code and Environmental Sustainability Goals (ESG)

Source: Federal Ministry of Petroleum Resources

Stakeholder Benefits of Domestic Gas Value Chain

Source: DPR

Commercial Network across the Gas Value Chain

  • Baker Hughes
  • PowerGas, SinoGas CNG
  • Cryo Pur Bio-LNG
  • Eroton E&P OML 18
  • NLNG Domestic LPG Scheme
  • Falcon Kinetics (LPG)
  • Banner Energy (LPG)
  • Energy and Plant Technology (EPC)
  • MetCalfe Energy, NRG Group
  • Stellae Energy
  • Rystad Energy Upstream Research
  • Mars Multiconcepts Vessels, AA&R Investments
  • Africa50 Infrastructure Finance
  • Asharami Synergy LPG
  • Nigeria Gas Association & LPG Association
  • Manufacturers Association of Nigeria
  • European Energy Commission

Our Qualifications

Recent achievements of Highly experienced and versatile team of Gas professionals in the Nigerian Oil & Gas Sector:

  • Secured exemptions for a Gas Producer from being taken up by the Nigeria Gas Flare Commercialization Program (NGFCP) by engaging 2 Ministers of State for Petroleum that prevented Aiteo’s OML 29 Associated Gas Volumes from which protected the company’s annual gas revenue.
  • Secured first Gas Sales Revenue over $5M for 40 MMscfd Gas Sales Agreement with 3 Offtakers
  • Provided gas monetization solution to 6 oil blocks and managed a host of gas processing solution providers.
  • Managed projects worth over $4bn in oil and gas resource development.
  • Vast knowledge in technical aspects of oil production/facility HSE standards and recommended oil field practices.
  • Lead Procurement for the revamping/reopening of 2 oil flow stations that added a cumulative 10,000bpd to the overall production.
  • Led Procurement for the upgrade and overhaul of existing gas turbine compressor control unit to enable the processing of 20MMSCFD natural gas and deliver energy cost savings on the use of gasoil.
  • Managed host of Gas Processing Solution Providers, adapting emerging technologies to bridge infrastructure deficiencies for gas development.
  • Led Opportunity identification and evaluation, Data Room Management, Buyer’s Database Management, Bids management, opening and analysis, anchoring data room question and answer forum, preparation of oil and gas agreements and commercial inputs into the deal process, stakeholder management and media and business environment monitoring.
  • Consulted on identification, management, monitoring and resolution of risks/threats to the project. Made inputs into the management of interfaces with Investment Banks, Lawyers, Business Advisers and Regulatory Agencies. Divestment Team oil and gas agreements specialist.

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