Nigeria's domestic gas supply has reached a milestone of over 2 billion cubic feet per day, according to Ekperikpe Ekpo, the minister of state for petroleum resources (Gas). This achievement is expected to attract significant investment in the sector, with the government targeting $30 billion by 2030. The increased supply is crucial for powering plants and factories, which have long been hindered by shortages in Africa's most populous nation.
Total gas production in Nigeria has risen to 7.5 billion cubic feet per day, up from 6.8 billion in 2023. Proven reserves have also grown to 215.19 trillion cubic feet from 208.83 trillion, solidifying Nigeria's position as one of the continent's largest gas holders. The government aims to increase output to 10 billion cubic feet per day by 2027 and 12 billion by 2030, driven by demand from power generation, industry, and exports.
To achieve these ambitious targets, Nigeria needs to accelerate production by roughly a third within a year to reach the 2027 goal and by over 60% to reach the 2030 target. The government is investing in new pipelines and processing plants, including the Obiafu-Obrikom-Oben line, which can carry 2 billion cubic feet per day and is expected to free up over 500 million standard cubic feet per day for domestic buyers.
Another critical project is the Ajaokuta-Kaduna-Kano pipeline, which is about 95% complete. This pipeline will extend gas supply to regions that have had limited access to piped fuel, promoting economic growth and development. These projects are part of a broader effort to build out Nigeria's midstream and downstream infrastructure, which is essential for delivering gas to end-users.
Ekpo highlighted the success of a state-backed financing vehicle, the Midstream and Downstream Gas Infrastructure Fund, which has attracted 1.6 trillion naira in private investment with 671 billion naira in public funds. This leverage has supported 31 projects covering 205 infrastructure assets, which are expected to deliver 475 million standard cubic feet per day to the domestic market.
Meeting the $30 billion investment goal will require sustained interest from international oil companies, local producers, and infrastructure investors. Despite Nigeria's regulatory and currency risks, the government's focus on gas as a transition fuel and growth engine presents opportunities for economic diversification and reduced reliance on imported fuels.
The growth of Nigeria's gas sector has significant implications for the country's power system, which is largely dependent on gas-fired plants. A more reliable gas supply could lower costs for manufacturers and reduce the country's reliance on costly diesel generators. With careful planning and investment, Nigeria's gas sector can drive industrial growth and provide a stable power supply.
Key points
- The Nigerian government aims to increase gas production to 12 billion cubic feet per day by 2030.
- The government is investing in new pipelines and processing plants to support the growth of the gas sector.
- Nigeria's gas sector has the potential to drive economic growth and reduce the country's reliance on imported fuels.
