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Natural Gas Energy Transition

By: Yinka Adelodun GM, Upstream & Engineering Divisions


The year 2022 is a year that we have experienced or seen the manifestation of our changing climate. We have all heard the news of forest fires in America and Europe, heatwaves in Europe with London hitting 42oC, a third of Pakistan is under water due to extreme flooding, and most recently hurricanes Fiona and Ian causing utter devastations in Canada and US respectively. We are experiencing climate change in Nigeria also, as can be observed with desertification in the Northern part of the country and series of floodings that have been reported in places like Lokoja and Enugu.

All these extreme weather conditions are being attributed to Green House Gases (GHGs) we are emitting because of our dependence on burning hydrocarbon-based energy sources to power global economies, especially the developed countries economies. Unfortunately, the more we emit GHGs, the more we increase the capacity of earth’s atmosphere to capture heat and the more rapidly our climate will change. These changes will be manifested through extreme weather conditions.

Because of our changing climate due to GHG emissions, the world is now looking at transitioning away from hydrocarbon-based energy sources into more sustainable energy sources such as solar, wind, hydrogen.

Any company that wants to stay relevant in the Energy Industry must actively look at ways it can participate in the Energy Transition space. Not only does this make sense from ensuring we leave a healthy world for the next generation but it also makes sense from a business perspective because Levene are in the Energy Industry, and not just the oil and gas Industry. Levene Energy Group is determined to be part of the solution, and that is why we have a clear strategy to do our part to support the energy transition agenda of Nigeria and the world in general.

As we all know, our core competence at Levene is commodity trading. Our strength is in connecting energy feedstocks to off-takers in an economically viable manner. There are two key areas of Energy Transition space we believe we can leverage our strength, and these areas are in natural gas and solar energy. We have developed our strategy around these two sources of energy. This editorial is focused on our natural gas strategy.

Natural Gas – The Transition Energy Source

Most in the world have accepted that natural gas is the transition energy source would support the world to move from hydrocarbon-based energy sources to more sustainable energy sources. Where possible, natural gas will be used to replace coal and oil applications because gas, when burnt, has a lower GHG emission footprint when compared to coal or oil. As an example, coal power plants are now being replaced with gas power plants in developed countries such as Canada and the US; even China is going through the same process.

In addition to gas being the transition energy source, gas has also become an energy security commodity because of the Russia-Ukraine war. The Europeans are now actively looking for secured sources of LNG to power their economies. Nigeria is well positioned to take advantage of this situation because the country has over 200 Tcf of gas in reserve.

Lastly, and most importantly, Nigeria and Africa in general, need natural gas to power its economies. Natural gas does not require significant processing and refining like oil. Natural gas can be used for electric power generation, transportation, and cooking. Natural gas has an additional advantage in Nigeria because it cannot be easily stolen like oil.

Our Strategy

For us at Levene, our strategy is to support the development of the midstream of natural gas value chain in Nigeria. We plan to be an active participant in managing gas processing plants and pipelines. We are also looking to get involved with LNG processing and transportation to help feed the world with Nigeria natural gas. We will leverage our strong relationships with financial institutions to bring investment to develop gas fields in Nigeria and secure long-term offtake agreements for both natural gas and LNG. All this plays into our strength, and that is linking energy feedstocks to off-takers.

We are already taking concrete steps in achieving our ambition. We were recently awarded gas distribution franchise licenses for both Ibeju-Lekki and Badagry-Seme Gas Distribution Areas by the Nigeria Gas Marketing Company Limited. We are in active conversation with Nigeria Gas Company to build gas processing facilities. We are also seeking to bring investment to Nigeria to develop strategic OML gas fields. We are working with major players in Europe to secure long-term offtake agreements for Nigerian gas.

It is truly an exciting time to be part of the Levene family because we have a management team that is determined to execute on its strategy to be part of the solution to help transition the world to more sustainable forms of energy.