scholarly journals ECONOMIC FRAMEWORK FOR GAS PIPELINE DEVELOPMENT IN NIGERIA

2020 ◽  
Vol 6 (12) ◽  
pp. 46-63
Author(s):  
Henry Biose ◽  
Adewale Dosunmu ◽  
Chijioke Nwaozuzu
Keyword(s):  
Natural Gas ◽  
Economic Model ◽  
Net Present Value ◽  
Clean Energy ◽  
Economic Indicator ◽  
Gas Pipeline ◽  
Economic Life ◽  
Rate Of Return ◽  
Natural Gas Pipeline ◽  
Economic Framework

The paper present an economic model and framework for the development of natural gas pipeline for sustainable economic development in Nigeria. The study reviewed the economics of natural gas pipeline development in Nigeria. The research formulated an economic model for a case study of Calabar to Ajaokuta 417km gas pipeline project and a discounted cash flow for an economic life of 40 years. The project economics indicates a Net Present Value (NPV) of 12.5 billion USD with a discounted payback period of 7 years and 9 nine months, Profitability Index (PI) of 7.30, Internal Rate of Return of 23.05% and Growth Rate of Return 26.97% and these project economic indicator shows that the gas pipeline investment is viable. This study provides an economic model that would guarantee security of gas supply, provide access to clean energy and provides an economic framework to support long term natural gas pipeline development in Nigeria

scholarly journals COST – BENEFIT ANALYSIS FOR NIGERIAN NATURAL GAS PIPELINE INVESTMENT

2020 ◽  
Vol 7 (9) ◽  
pp. 52-65
Author(s):  
Gift Nwabueze ◽  
Joel Ogbonna ◽  
Chijioke Nwaozuzu
Keyword(s):  
Natural Gas ◽  
Net Present Value ◽  
Oil And Gas ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Gas Pipeline ◽  
Transport Cost ◽  
Benefit Analysis ◽  
Present Value ◽  
Natural Gas Pipeline

This paper performs cost-benefit analysis of a pipeline infrastructure project based on a given natural gas demand in order to estimate the net present value and payback time for natural gas pipeline investment in Nigeria. The result of the cost-benefit analysis indicates a positive net revenue and net present value (NPV) at the current regulated transport cost and availability factor for gas pipelines in Nigeria. However, with a payback period of 14 years, a natural gas pipeline project in Nigeria is likely to lose-out investment capital to other competing investments within the oil and gas sector. Scenario analysis indicates that by doubling the regulated transport cost with a 50% tax reduction, the pipeline investment results in a much higher NPV and a payback of 4 years, which is more acceptable to investors.

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