Nigeria, blessed with vast natural gas reserves estimated at about 209 trillion cubic feet, is embarking on an ambitious “gas revolution” to propel its economy forward.
President Bola Tinubu’s recent inauguration of three gas processing plants and a pipeline underscores this commitment. But can this strategy deliver on its promise of prosperity?
The President inaugurated three milestone projects, which are the expanded AHL Gas Processing Plant; the ANOH Gas Processing Plant, and the 23.3km ANOH to Obiafu-Obrikom-Oben (OB3) Custody Transfer Metering Station Gas Pipeline, on Wednesday.
“It is pleasing that when these projects become fully operational, approximately 500MMscf (Million standard cubic feet) of gas in aggregate will be supplied to the domestic market from these two gas processing plants, which represents over 25% incremental growth in gas supply. “President Tinubu said.
Nigeria currently produces about 2 Billion cubic feet per day [Nigeria LNG], so this translates to an additional 500 million cubic feet.
A Gas-Fueled Future
The projected 25% increase in domestic gas supply holds immense potential.
Increased gas availability for power generation could significantly reduce blackouts, a chronic problem hindering business activity.
This could unlock industrial growth, particularly for gas-reliant industries like fertilizer production.
According to Dr. Kolowale Ajayi, a leading economist at Lagos Business School, “a stable gas supply could lead to a 5-7% growth in the manufacturing sector within the next five years.”
The creation of new gas-based industries translates to job opportunities across various sectors, providing a much-needed boost to Nigeria’s employment landscape.
Key Facts
The $650m ANOH gas project just commissioned will increase Nigeria’s gas production by two folds.
$20bn is being targeted by the country between 2020 and 2030 as investments in Nigeria’s gas industry with a compound annual growth rate of 16.6 percent increase in demand expected.
This demand will be driven by several ongoing projects such as NLNG Train 7, Nigeria/Morocco pipeline, NLNG Train 8, AKK pipeline-related projects, and most recently the newly launched CNG initiative of this administration.
CEO of Seplat Energy, Roger Brown praised the President, saying: “Seplat Energy is pleased with the progressive reforms by President Bola Ahmed Tinubu and his administration… The ANOH gas plant will benefit from these reforms and incentive. No doubt, the ANOH’s gas will further reduce Nigeria’s carbon intensity and increase energy supplied to the Nigerian domestic market.”
Economic Prosperity
Beyond domestic benefits of massive job creation, a thriving gas sector could position Nigeria as a regional gas supplier, generating additional revenue streams and diversifying the economy away from its dependence on oil exports.
Experts have repeatedly warned that “Nigeria’s overreliance on oil makes it vulnerable to price fluctuations. A strong gas sector can act as a buffer and provide more economic stability.”
Navigating the Pipeline
Like any other endeavor, the path to a gas-fueled future is not without hurdles.
The “presidential CNG initiative” promoting gas-powered vehicles requires significant investment in refueling infrastructure – a substantial undertaking.
Continued government support and investor-friendly policies are also crucial.
Also very important is tackling gas flaring, the burning of excess gas during oil production, this is essential for environmental and public health reasons.
Ensuring pipeline security remains equally paramount.
Big potential
For most Energy Experts, the potential rewards of a successful gas revolution are undeniable.
They however pointed out that significant challenges lie ahead.
“The government have a lot of work to do because the success of this gas revolution hinges on their ability to create an investor-friendly environment, address gas flaring, and ensure pipeline security. ” Segun Adio an Energy Expert noted.
“While the path is fraught with difficulties, a well-executed gas strategy has the potential to unlock economic growth, create jobs, and propel Nigeria towards a cleaner energy future.” He concluded.
