Nigeria is poised to unlock significant economic potential from its vast natural gas reserves, with estimates suggesting that the country could generate up to $18.3 billion annually through the gas sector. However, to realize this potential, Nigeria needs an investment of between $10 billion and $15 billion over the next three years to develop the necessary infrastructure to fully harness its gas resources.
Mele Kyari, the Group Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), provided these figures during his presentation at the 2024 CERAWeek conference held in Houston, USA. The global event, hosted by S&P Global, focused on the evolving dynamics of energy markets, climate change, technological advancements, and geopolitics.
According to PricewaterhouseCoopers (PwC), tapping into Nigeria’s proven gas reserves could add an estimated $18.3 billion to the country’s domestic economy annually. The firm further highlighted that optimizing the use of domestic gas resources could create up to 6.5 million Full Time Equivalent (FTE) jobs, offering substantial economic and employment benefits.
Kyari emphasized that the NNPC’s current priority is to expand the capacity to supply gas to the domestic market, affirming that Nigeria is fundamentally a gas-rich nation, with oil as a by-product. Despite possessing over 208 Trillion Cubic Feet (TCF) of proven gas reserves and an additional 600 TCF in potential reserves, Nigeria struggles to fully exploit this resource due to inadequate infrastructure and the lack of sufficient investment in the sector.
The country’s domestic gas supply has been under strain, as seen in the rising prices of cooking gas. According to the National Bureau of Statistics (NBS), the price of a 5kg cylinder of cooking gas increased from N5,139.25 in January 2024 to N6,154.50 in February 2024. This rise is attributed to factors like limited investment in natural gas exploration and a sharp decline in associated gas production, partly due to rampant crude oil theft.
Kyari pointed out that energy availability is a critical concern for the country, with the NNPC focused on finding the most cost-effective means to enhance domestic gas supply. He noted that a decade ago, the prospects for gas were not as promising as they are today, and now, efforts are underway to establish a network of gas pipelines that will support domestic consumption.
Looking ahead, Kyari anticipates that with an investment of between $10 billion and $15 billion over the next few years, Nigeria could address its immediate infrastructure gaps. In addition to boosting domestic supply, the country is exploring ways to expand gas exports, with partnerships aimed at creating new avenues for growth.
He also highlighted a significant ongoing project, the construction of a $25 billion pipeline network that will span 13 African countries, connect to Morocco, and eventually reach Europe, further strengthening Nigeria’s role in the global gas market. Furthermore, the ongoing development of the NLNG Train 7 is expected to significantly increase Nigeria’s liquefied natural gas (LNG) production capacity, potentially doubling its current output once completed.
Kyari called for broader regional collaboration, urging nations in sub-Saharan Africa to join efforts in closing the energy access gap and supporting sustainable growth in the sector.
