ANALYSIS OF LEVELISED GAS TRANSPORTATION COST IN NIGERIA

AHMED, ADAMU and DERMOT, RODDY, and TONY, ROSKILLY and VOLODYMYR, BILOTKATCH and YAO DONG, WANG (2014) ANALYSIS OF LEVELISED GAS TRANSPORTATION COST IN NIGERIA. In: Second International Conference on Advances In Social Science, Management and Human Behaviour - SMHB 2014, 25 - 26 October, 2014, Zurich, Switzerland.

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Abstract

Nigeria is committed toward developing its Natural Gas energy subsector in order to address the energy trilemma in the country; as a result, Nigerian Gas master plan proposes new gas pipeline. The paper analyzes the life cycle cost (using Shahanon Pipeline Cost Model) of the Gas pipeline networks (FRA) proposed in the plan, and introduces additional and separate pipeline system (SRA) for comparison. SRA pipeline represents 67% increase on the FRA pipeline capacity, 115% increase on the FRA’s capex and 152% increase in kilometer distance, and as a result, led to increase in Levelised Gas Transportation Cost (LTC) by 25%. This justifies that higher increase in capacity results to relatively modest increase in LTC. The effect of adjusting pipeline capacities on LTC was also observed, and LTC was discovered to fall continuously as capacity increases. The study concluded that, it is more economical to have large gas pipeline capacities and operate pipelines at their full capacities, as more capacity leads to low LTC. Therefore, it is advisable if Nigerian government will consider the second alternative route as it covers most of the demand potential areas and has relatively low LTC. Moreover, investing in the SRA will also serve long-term investment needs, as all potential demand areas are covered.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Levelised Gas Transportation Cost (LTC), First Route Alternative option (FRA), Second Route Alternative option (SRA)
Depositing User: Mr. John Steve
Date Deposited: 29 May 2019 07:58
Last Modified: 29 May 2019 07:58
URI: http://publications.theired.org/id/eprint/2946

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