A recent assessment by the Natural Resource Governance Institute (NRGI) has revealed that Nigeria's decade-long drive to transform its economy through natural gas is likely to deliver only about 30% of the additional production originally targeted for 2030. The report, titled "Nigeria's Decade of Gas at Midpoint: Progress, Gaps and the Path Forward," projected that Nigeria could add only about 1.3 billion cubic feet per day (bcf/d) of new gas production by 2030.
The Decade of Gas initiative, launched in 2021, aimed to transform Nigeria into a gas-powered economy by 2030, with increased gas supply expected to support electricity generation, households, transportation, industry, and exports. Despite six upstream projects having started production since 2021 and three others reaching Final Investment Decision, production growth is falling significantly short of the original ambition.
According to NRGI, the assessment was based on Rystad Energy's UCube database and an analysis of Nigerian gas projects that have started production since 2021 or are expected to commence by 2030. The report stated that even under the most expansive scenario, additional production would reach only about 1.3bcf/d, representing just 30% of the government's target for additional gas production over 2020 levels.
The report warned that most of the incremental volumes were likely to be channelled towards liquefied natural gas exports rather than domestic consumption, potentially limiting the contribution of the Decade of Gas to Nigeria's energy access and industrialisation objectives. This raises concerns about the impact of the initiative on Nigeria's energy security and economic development.
NRGI estimated that only between 20 and 30% of the new gas production was likely to be available for domestic use. The report noted that the Decade of Gas had been built around the expectation that increased production would provide gas for power generation, clean cooking, transportation, and industries, while simultaneously expanding LNG exports and foreign exchange earnings.
However, Nigeria's long-standing inability to establish bankable domestic gas demand remained one of the biggest constraints to expanding gas production. The report highlighted structural limitations that challenge gas-sector development and the risks that come from an expansive gas-infrastructure build-out.
As of now, only $2.7 billion of the $30 billion capital expenditure required for the initiative has been committed. With LNG exports expected to take the bulk of additional volumes, concerns are growing about the impact on domestic energy needs and the economy.
Key points
- Nigeria's gas production is expected to fall short of the 2030 target by 70%.
- Only 30% of the additional gas production target is likely to be achieved.
- Most of the new gas production will be channelled towards LNG exports rather than domestic consumption.
