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Nigeria Seeks to Tap into Huge Natural Gas Reserves


Nigeria plans to reform its gas sector by introducing new pricing rules and providing infrastructure to improve supplies to the domestic market. For VOA, Gilbert da Costa in Abuja reports that another key component of the initiative is the enforcement of a ban on gas flaring by 2008.

Analysts say enough gas is flared in Nigeria to supply half of the power needs of sub-Saharan Africa, excluding South Africa.

Apart from Russia, Nigeria is the world's largest source of flaring, a method used by oil field operators to get rid of gas that is released as a byproduct of crude oil production. Besides wasting gas that can be used for import and export, flaring causes the release of carbon dioxide emissions into the environment.

Oil companies operating in Nigeria have until now rebuffed pressures from environmentalists and local communities to reduce gas flaring. Nigeria is slowly working towards minimizing flares, and has established a zero flaring deadline for 2008.

Nigeria is the world's eighth largest exporter of crude oil and has the seventh biggest proven reserves of gas, but it lacks the infrastructure and investment to utilize its valuable resource.

Osita Izunaso, chairman of Nigeria's Senate Committee on Gas, says revenues from gas could surpass that of oil in the next 10 years if infrastructure constraints are addressed.

"Nigeria is discovered to be a gas province, because we have more gas in Nigeria than oil," he noted. "And in the next couple of years, approximately in a decade if we put in the right infrastructure for gas, certainly gas will be the mainstay of the economy. We have gas everywhere in Nigeria."

The government this week announced new pricing mechanisms and plans to improve infrastructure for domestic gas use, particularly for power generators.

Nigeria currently produces less than 3,000 megawatts of electricity per day, grossly inadequate for a country of 140 million people.

Efforts to turn gas into liquefied natural gas so far have been limited by the security situation in the oil-rich Niger Delta.

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