Project Abstract

Abstract
The aim of this research project is to evaluate Nigerian gas production and electricity generation from natural gas using regression analysis. Nigeria is one of the leading producers of natural gas in Africa, and natural gas is a significant source of energy for electricity generation in the country. Understanding the relationship between gas production and electricity generation is crucial for energy planning and policy formulation in Nigeria. Regression analysis is a statistical technique that can help in examining the relationship between two or more variables. In this study, regression analysis will be used to analyze historical data on Nigerian gas production and electricity generation. The main objective is to develop a regression model that can predict electricity generation based on gas production levels. This model can provide insights into how changes in gas production may impact electricity generation in Nigeria. The research will involve collecting data on Nigerian gas production and electricity generation from official sources such as the Nigerian National Petroleum Corporation (NNPC) and the Nigerian Electricity Regulatory Commission (NERC). The data will cover a period of several years to capture long-term trends and patterns. Descriptive statistics will be used to analyze the data and understand the basic characteristics of gas production and electricity generation in Nigeria. Regression analysis will then be applied to the data to estimate the relationship between gas production and electricity generation. Different regression models will be tested to identify the best-fitting model that can accurately predict electricity generation based on gas production levels. The analysis will also consider other factors that may influence electricity generation, such as demand for electricity, fuel prices, and government policies. The findings of this research can have important implications for energy policy and planning in Nigeria. By understanding the relationship between gas production and electricity generation, policymakers can make informed decisions on energy infrastructure investments, gas development projects, and electricity generation capacity expansion. The regression model developed in this study can serve as a tool for forecasting electricity generation based on different scenarios of gas production levels. In conclusion, this research project aims to evaluate Nigerian gas production and electricity generation from natural gas using regression analysis. The findings can contribute to a better understanding of the dynamics between gas production and electricity generation in Nigeria and inform energy policy decisions for sustainable development.

Project Overview

INTRODUCTION

1.1. Background of the study

Nigeria is a nation that has been blessed with mineral resources ranging from solid minerals to crude oil deposits; right from the northern part of Nigeria to the southern part of Nigeria is littered with amazing natural deposits. Chief among these is the crude oil. Crude oil is largely deposited in the south southern part of Nigeria.Besides crude oil, Nigeria is blessed substantial deposit of natural gas. Although the consumption of natural gas increased steadily in the late 1970s and 1980s, and in 1990 constituted more than 20 percent of Nigeria’s total energy from commercial sources, the quantity of gas used was only a fraction of what was available. In 1988, with the largest natural gas reserves in Africa, Nigeria produced 21.2 billion cubic meters per day, with 2.9 billion cubic meters used by the National Electric Power Authority (NEPA) and other domestic customers, 2.6 billion cubic meters used by foreign oil companies, and 15.7 billion cubic meters (77 percent) wasted through flaring. Small amounts of gas were also consumed by petroleum producers to furnish power for their own operations and as fuel for some equipment. Domestically, there remained a large potential market for bottled liquid petroleum gas (LPG), which was produced primarily at the Kaduna refinery.In the early 1990s, Nigeria was undertaking a major project to market liquefied natural gas (LNG) (instead of flaring gas produced in the oil fields) by building a gas liquefaction plant on the Bonny River situated in Rivers state. Four companies signed an agreement in May 1989 to implement this plan: NNPC (60 percent share)), Shell (20 percent), Agip (10 percent), and Elf Aquitaine (10 percent), with plant construction scheduled to begin in 1991. Other aspects of the project involved Nigerian government construction of gas pipelines for distribution to domestic, residential, and commercial users and a supply of gas to the NNPC chemical complex at Port Harcourt. Much of the gas was intended for export, however, and the first LNG tanker was launched in October 1990s through the cooperative efforts of Nigeria and Japan.The importance of gas production to an economy cannot be over emphasized. One of the essential benefits of gas generation which determines how the economy of any nation would perform is power generation. Since the discovery of natural gas in Nigeria, power generation has its fair share of inconsistencies. One would have expected that the discovery of gas would have naturally led to the improvement in power generation. Some say it is as a result of the incompetency of government others say the government should be exempted. The truth remains that power generation using the natural gas has not been consistent enough to improve. We strongly believe that there may be a distinct relationship between gas production and power generation ion Nigeria.

1.2. Statement of the general problem

The problem of power generation has remained a persistent problem in Nigeria. A lot has been done to reviving the sector but the issue has persistent which has led us to examining the relationship between gas production in Nigeria and electricity generation.

1.3. Aims and objectives of the study

The following are the aims for embarking on this research work

• To examine the nature of the relationship between gas production and electricity generation in Nigeria.
• To identify the challenges of constant electricity generation in Nigeria.
• To be able to predict the level of electricity generation in the future from the data of the past years on gas production available to us.
• To recommend ways of ensuring adequate electricity generation in Nigeria.

1.4. Significance of the study

The outcome of this study would be of tremendous benefit to researchers, policy makers and the government in addressing the electricity generation issue in Nigeria.

1.5. Scope of the study

This research work is restricted to the evaluation of Nigerian gas production and electricity generation from natural gas from 1999-2014.

1.6. Research Questions

• Is there a relationship between gas production and electricity generation in Nigeria?
• If yes, what type of relationship exists between gas production and electricity generation in Nigeria?
• What are the challenges confronting constant electricity generation and supply in Nigeria.
• Can the level of electricity generation of the future years be adequately predicted from the past records of gas production and electricity generation in Nigeria?

1.7. Research hypotheses

Hypothesis 1

H0: there is no significant relationship between gas production and electricity generation in Nigeria.

H1: there is a significant relationship between gas production and electricity generation in Nigeria.

Hypothesis 2

H0: Gas production does not significantly influence the level of power generation and supply in Nigeria.

H1: Gas production significantly influences the level of power generation and supply in Nigeria.

1.8. Definition of terms

• Electricity:a form of energy resulting from the existence of charged particles (such as electrons or protons), either statically as an accumulation of charge or dynamically as a current.
• Natural gas:Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane, but commonly including varying amounts of other higher alkanes, and sometimes a small percentage of carbon dioxide, nitrogen, and/or hydrogen sulfide.
• Generation:the production or creation of something.
• Natural resources: Mineral Resources can be defined as the concentration of material of economic interest in or on the earth’s crust, whereas Ore Reserves are the parts of a Mineral Resource that can at present be economically mined.
• Mineral:A mineral is a naturally occurring substance, representable by a chemical formula that is usually solid and inorganic, and has a crystal structure.
• Crude oil:Crude oil, commonly known as petroleum, is a liquid found within the Earth comprised of hydrocarbons, organic compounds and small amounts of metal. While hydrocarbons are usually the primary component of crude oil, their composition can vary from 50%-97% depending on the type of crude oil and how it is extracted.
• Gas flaring:the burning of natural gas that is associated with crude oil when it is pumped up from the ground. In petroleum-producing areas where insufficient investment was made in infrastructure to utilize natural gas, flaring is employed to dispose of this associated gas.