Abstract
The aim of this project is to economically analyze Coal Bed Methane (CBM) development in Nigeria. This will offer an opportunity to use gas from the Nation huge coal reserves for domestic and exportation purposes to boost the economy of Nigeria. CBM can be used to generate power as well as manufacture alternative products. The profitability of coal bed methane (CBM) project depends on factors such as seam thickness, gas content, methane content, coal rank and permeability. Its economics are influenced by other variables, such as fiscal policy, depth of coal seam, volume of water disposal, access to market and price of gas. Potential and existing sites for coal bed methane extraction in Nigeria were identified. Kim’s equation was used to estimate the gas content. The gas-in-place was derived with Volumetric method. Methane quantification was estimated using Eddy curve. It is observed that the ultimate reserves, the capital costs, and the gas price have significant effect on the net present value (NPV) and internal rate of returns (IRR) and thus the economic viability of the project. Economic analysis of LNG and Pipeline projects for gas transmission were comparatively examined. It is observed that the gas price and demand at the market hub depend largely on the mode of transmission.
Highlights
When organic material is geologically turned into coal, Methane gas is produced
To 7, it can be observed that Oba Nnewi, Inyi, Ogboyoga, Okaba, Orukpa, Onyeama and Okpara Coal Fields are economically viable to be produced to add to the natural gas reserves of Nigeria at present
From analysis of the sensitivity, it is observed that the Taxes, Royalty CAPEX, OPEX, Production rate and the Gas price have significant effect on the Net present value (NPV), Internal rate of returns (IRR) and the Discounted Payback period the economic viability of the project
Summary
When organic material is geologically turned into coal, Methane gas is produced. The federal government has recently reiterated its commitment to boost the energy sector by utilizing the abundant coal reserve in the country [4]. According to the Nigerian Coal Corporation [12], the Anambra basin located in the south eastern Nigeria appears to contain the largest and most viable coal resources. The basin is constrained by the Niger River on the west, the Benue River on the north and the Enugu Escarpment on the East. The basin covers an area of approximately 1.5million hectares and comprises of eight Coal fields, namely: Oba Nnewi, Ezimo, Ogboyoga, Okaba, Orukpa, Onyeama, Okpara and Inyi Coal Seam Gas [12]
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