Nigeria could face a gas supply shortfall of 3.1 billion cubic feet per day (bcf/d) within the next six years unless urgent steps are taken to upgrade gas infrastructure and boost investments in renewables.
At the 2024 NAEC Energy Conference in Lagos on Thursday, stakeholders estimated that $20 billion in annual investments would be required to address the nation’s infrastructure deficit. Speaking at the event, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) CEO Gbenga Komolafe, represented by Director of the Lagos Regional Office, Paul Osu, noted that gas demand is growing faster than supply, driven by increasing domestic demand due to improved domestic supply obligations.
Komolafe warned that Nigeria could face a significant gas supply crisis, with a projected shortfall of 3.1 bcf/d by 2030 if current trends continue. While natural gas production is expected to rise from 8.0 bcfd in 2020 to 12.2 bcfd by 2030 due to major projects like NLNG Train 7 & 8, the Nigeria-Morocco pipeline, and the Ajaokuta-Kaduna-Kano (AKK) Pipeline, this increase will not meet the high case demand, which is projected to reach 22.2 bcfd by 2030.
He emphasised that as the power sector’s challenges are addressed, the demand for gas will grow exponentially, creating opportunities for gas development in the upstream sector. He also highlighted the need to complement hydrocarbon development with renewable energy, and urged investors to take advantage of the sustainability mandates in the Petroleum Industry Act (2021) and its fiscal incentives.
In agreement, Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) CEO Farouq Ahmed, represented by Director of Public Affairs, George Ene-Ita, stressed the importance of energy security for Nigeria’s economic growth. Despite the country’s gas potential, about 2.5 bcf of gas is still flared daily, which could be used to generate significant electricity for the country. Ahmed noted that the “Decade of Gas” initiative aims to address this waste and add up to 5,000 megawatts (MW) to the national grid by 2030, reducing dependence on imported fuels.
He also pointed out the country’s lack of infrastructure, with fewer than 3,000 LPG refilling plants and fewer than 50 CNG compression stations, which is insufficient for a population of 200 million. Ahmed called for the development of a strong gas sector to meet domestic energy needs and position Nigeria as a reliable energy supplier for neighbouring countries, enhancing regional energy security.
Conference Chairman and Group Managing Director of Rainoil Limited, Gabriel Ogbechie, said Nigeria is at a critical juncture with its vast natural gas reserves. He cited the NEITI report, which highlights the need for $20 billion annually to close the gap in gas infrastructure. Ogbechie emphasised the importance of scaling up gas alternatives, especially following the removal of the petrol subsidy, to ensure clean, affordable energy solutions for the country.
He stressed the need for substantial investments in gas infrastructure, particularly in the face of issues like pipeline vandalism, and urged the government to strengthen policies supporting compressed natural gas (CNG) and liquefied petroleum gas (LPG) initiatives for both transportation and domestic use.