Building a gas supply value chain in Nigeria

Nigeria

Aloy Duru, chief executive of Epic Atlantic, talks to The Energy Year about Nigeria’s energy transition, challenges within the local energy industry and the services offered by the company. Epic Atlantic is an indigenous multi-disciplinary engineering company based in Nigeria.

How is Epic Atlantic planning on embracing Nigeria’s energy transition?
Nigeria is transitioning to gas, which is a friendlier and cleaner fossil fuel. The economic rationale is clear: most of the petroleum products we use are imported because our refineries are not working, while we have an abundant and untapped supply of gas that needs to be monetised.
Epic Atlantic wants to be part of alternative fuel delivery to cottage IPPs and the automotive industry. We need to establish a functioning supply value chain: we must have available gas, companies capable of compressing it and working retail stations. The main challenge is the limited number of engines that can run on gas. The optimal solution therefore would be to start with dual-fuel engines and gradually transition as we grow the number of gas outlets to foster market penetration.
We are analysing how to foster domestic utilisation of pipeline gas, as the demand for LPG is rising incrementally. Moreover, Nigeria is going through industrialisation, and an uninterrupted power supply is crucial, making piped gas vitally important for feeding IPPs.
We are also working with Powergas, the biggest CNG company in Nigeria. They have five stations, and we were the EPC contractor for their first station in Aba. Our last project together was the Ebedei CNG plant, which was commissioned two years ago, under an SPV between Powergas and foreign investors.

What are the main challenges that local companies face in the Nigerian energy industry?
The main challenge in Nigeria is access to finances, especially in the upstream segment, which is capital intensive. There is no comparison in liquidity between a major IOC that produces 2 million bopd, and a local company challenged with funding and delivering 10,000 bopd. We have plenty of knowledge and expertise to spur industrial growth, but at the same time we need an enabling environment for the acceleration of projects to materialise this vision.
The technical expertise is easy to get. Technology partners can come on board because they are free to make money from their technology. The issue at stake is to find a suitable financial partner within the correct timeframe. Depending on the size of the field, it takes two to four years to bring it to production. Additionally, the finances must come within this timeframe to sustain the initial investment.

What are the primary services offered by Epic Atlantic?
We provide engineering services for the upstream sector, which includes field maturation and development services, design and engineering, and project management services. We are currently offering field development advisory to a local E&P company. We are also involved as engineering consultants in a project to gather and process gas as feedstock for a petrochemical plant.

Where do you see Epic Atlantic in the next five years?
We want to grow by fostering gas market penetration, specifically through the establishment of CNG retail stations and CNG dispensers. We will start this plan by narrowing down our geographical catchment area, using Lagos as a starting point. We know that we will deliver these projects because we understand the gas business, gas processing and gas engineering. We are contributing to the development of proper standards in project execution in Nigeria.

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