nnpc

Sahara Group to inject $1bn into LPG vessels, Africa infrastructure

Gas plant

. Natural gas is not clean energy  

Sahara Group said it will invest over $1billion to enhance access to Liquefied Petroleum Gas (LPG) in Africa and emerging economies to boost energy transition on the continent.

Executive Director, Sahara Group, Temitope Shonubi, disclosed this at the African Refiners and Distribution Association (ARDA) conference 2021, in South Africa, where he spoke on the role of LPG in Africa’s energy transition, according to the company’s statement.

“Sahara, through its subsidiary, WAGL Energy Limited, is already working towards investing $1billion to ramp up its LPG fleet and terminal infrastructure over the next five years. In addition to the vessel fleet, Sahara is in the process of building over 120,000 metric tonnes of LPG storage in 11 countries,” he said.

Natural gas and energy transition

Sahara Group, like many other oil and gas companies and resource-rich countries, continues to use natural gas and its by-products as a vital “bridge” to help utilities shift to cleaner sources of energy.

However, while natural gas is a cleaner and more efficient fossil fuel than other traditional fuels, as it produces less pollution and greenhouse gases than its counterparts, according to the Centre for Liquefied Natural Gas, it is not “clean energy” or harmless to the environment.

The industry (Petroleum) and governments repeatedly fail to invest substantially in this technology, with the practical result that gas emissions continue to go straight to the atmosphere.

Reuters had reported that climate scientists say that rising production of natural gas is emerging as one of the biggest drivers of climate change, and that plans for industry expansion could hobble efforts to stabilize the Earth’s climate.

According to the report, a U.N.-backed team of researchers found that the world was on track to produce 70% more natural gas in 2030 than would be compatible with the 1.5C goal.

“Most of the new gas production isn’t supplanting coal – it’s supplementing it. It’s answering demand for new energy,” said Rob Jackson, a professor at Stanford University, who chairs the Global Carbon Project, a group of scientists that tracks greenhouse gas emissions.

In particular, climate scientists are concerned about another greenhouse gas that leaks into the atmosphere during natural gas production: methane. Methane has a warming effect up to 80 or 90 times more powerful than carbon dioxide (C02) over a 20-year timescale.

Advocates of natural gas argue that gas-fired power plants can provide continuous electricity, backing up wind and solar operations that run more intermittently. Until batteries or other forms of energy storage become cheaper and more accessible, natural gas should serve as a complement to renewables, they say.

Climate scientists are increasingly concerned, however, that plans to massively expand the industry mean that using natural gas as a “bridge” could end up locking the world into a high-carbon and fast-warming future.

The industry also believes that technology could help. Carbon can be captured and stored underground through a process known as carbon capture and storage (CCS). The oil and gas industry has stressed the potential benefits of CCS technology in tackling emissions.

But the progress of that approach has been slow. Corinne Le Quere, a leading climate scientist at Britain’s University of East Anglia, told Reuters that “the industry and governments repeatedly fail to invest substantially in this technology, with the practical result that gas emissions continue to go straight to the atmosphere.”

Funding gas projects

Nigeria’s Vice President Yemi Osinbajo, recently cautioned against the plan to defund gas projects in the run up to the global Net-Zero emissions target, saying it will be unhelpful to developing countries in Africa.

Osinbajo, who spoke at High-Level UN events on the Energy Transition plan in Africa with special focus on Nigeria, ahead of the UN Climate Change Conference (COP26) summit in Glasgow, Scotland, warned that defunding gas projects will not benefit gas-based industries.

He opined that the ultimate goal of the global energy transition should be to achieve reliable net-zero-energy systems to power prosperous, inclusive economies.

“Limiting the development of gas projects poses dire challenges for African nations, while making an insignificant dent in global emissions. Energy demand in Nigeria and across Africa is set to rise, as indeed it must, to deliver the industrialisation, jobs and economy-wide progress people deserve,”

He further said Nigeria had already made a commitment to have 30% of its electricity supply from renewables by 2030, adding that natural gas is being used for industry, fertiliser manufacturing, and cooking, which were more difficult to transition than power generation.

Infrastructure development

Meanwhile, Sahara Group’s Shonubi listed the countries earmarked for storage infrastructure to include Nigeria, Senegal, Ghana, Cote d’Ivoire, Tanzania, and Zambia whose process has commenced and five others in the preliminary stage.

The Group claims its efforts are geared towards seamless energy transition in Africa through innovative energy solutions via its upstream, midstream, downstream downstream power businesses including partnerships with the United Nations Development Programme (UNDP) and other leading organisations.

Shonubi noted that Africa relies on imports to meet its LPG demand as a result of low crude oil refining capacity and absence of adequate wet gas being processed.

He said: “Africa’s refining capacity of 3,343,000 barrels per day is limited to just 20 countries; utilisation rates have fallen from about 75 per cent in 2010 to 55 per cent in 2020. Only six African nations have combined LPG storage capacity greater than 50,000MT.

“Economic progress is key to harnessing Africa’s latent LPG demand to boost economic performance.”

While set-up costs may be high, LPG has higher energy efficiency when compared to kerosene and fuel wood and it has virtual zero sulphur content. LPG is key to achieving the UN SDG 7 – Sustainable Development Goal of Universal Access to Energy.

He decried that Africa accounted for just four per cent of global LPG consumption last year.

LPG consumption in Africa is low compared to other markets. Africa’s consumption was 14MT (translating to 12 kilogram per person) in 2020, compared to Asia Pacific’s 108MT ((27kg/person), North America’s 74MT (123kg/person), Europe & Eurasia’s 49MT (49kg/person), Middle East’s 38MT (60kg/person) and Latin America’s 34 MT (53kgs/person).

Shonubi attributed the low LPG consumption in Africa to the hurdle of affordability, absence of large-scale LPG storage infrastructure, minimal vessels dedicated to the region, low set-up cost of firewood and kerosene stoves, as well as negative perceptions and fear of explosions due to poor safety standards, among other factors.

“While set-up costs may be high, LPG has higher energy efficiency when compared to kerosene and fuel wood and it has virtual zero sulphur content. LPG is key to achieving the UN SDG 7 – Sustainable Development Goal of Universal Access to Energy,” Shonubi said.

He said converting just 30% of Africa’s vehicle fleet to run on LPG would result in $3billion annual fuel-cost savings and about 40 billion in CO2 emission reductions, while indirect cost savings from health and infrastructure would exceed $15billionn annually.

On the role of African governments in encouraging LPG adoption, Shonubi canvassed an enabling policy environment to foster adequate private sector involvement and sustainability.

He said funding should be channelled into country-wide investment programmes, while megaprojects and regional integration should be accelerated to efficiently serve a larger population and grow the economy for multiple countries.

He also advocated growing Africa’s LPG consumption, through investments in LPG infrastructure and financing of LPG use through credit schemes, Pay-as-you-use, penalty for emissions, reward for global warming reductions, and inclusion of bio LPG among others.

He emphasised the need to protect the environment today for a safer and more environmentally-friendly tomorrow.

Total
0
Shares
Leave a Reply

Your email address will not be published.

Previous Post

Exchange approves listing of NGX Group

Next Post

Onyema resigns as NGX non-executive director

Related Posts
Total
0
Share