INTRODUCTION
In our 2023 year-end report, we analysed the opportunities, challenges, and transformations experienced in Nigeria's oil and gas industry, with a particular emphasis on gas. Additionally, we provided industry projections for 2024 and the upcoming years. Our report focused on Nigeria's energy transition eorts highlighting the nation's development and utilization journey where we examined historical gas policies, significant gas projects following the announcement of the 'Decade of Gas', international events such as the influence of the Baku-Tbilisi-Ceyhan (BTC) Pipeline on energy security in Europe, as well as the potential eects of the Nigeria-Morocco pipeline on both energy security and economic integration and collaboration within the African region. In our report, we stated that despite the global push for transitioning from fossil fuels to renewable energy (RE) sources, the International Energy Agency (IEA) has stated in its global pathway for energy transition that specific fossil fuels such as natural gas could serve as a transitional bridge for economies facing challenges in readily adopting renewable sources.1 In this Mid-Year Report, we examine the key projects propelling Nigeria's Decade of Gas Policy and its Energy Transition Plan (ETP). We also examine new investments in the petroleum industry aimed at driving economic growth and enhancing energy security. Additionally, we spotlight recent developments in Nigeria's gas sector, the sources of funding, and the projections for gas investments in the forthcoming years.
The future of the Nigerian petroleum industry will depend on utilising the country's abundant natural hydrocarbon resources for shared prosperity, energy accessibility, aordability, sustainability, and security. Consequently, the Nigerian Government has designated natural gas as the immediate transition fuel due to its lower carbon footprint compared to other fossil fuels. Nigeria's role as a major player in the global gas industry is ertainly not in doubt, as Nigeria ranks highest in Africa and 10th globally in terms of proven gas reserves with huge growth potential. As of January 1, 2023, Nigeria boasts 208.83 trillion cubic feet (tcf) of natural gas reserves, opening a large opportunity for investments in the upstream gas sector. A new target is being considered by the Federal Government of Nigeria to grow its gas reserves to 210 tcf by 2025 and to 220 tcf by 2030 with an upside potential of 600 tcf.2
In March 2021, former president Muhammadu Buhari declared the 2020s Nigeria's 'decade of gas'. In doing so, he signalled the government's renewed focus on gas as the fuel of choice for powering Nigeria's industrial ambitions. This 20-billion-dollar initiative is centred on four key pillars:
To achieve these goals, the government outlined several policy measures, including:
The Decade of Gas is expected to bring $14bn in FDI, $12bn FGN revenue and 2 million new jobs. Projections indicate a potential shortfall of 10bcf/day by 2030 which presents a huge opportunity for investment in the gas sector.3 High case supply needs to be attained to meet the base case demand. Supply is to be anchored on critical gas development projects that would create significant economic benefits and shared prosperity for Nigeria and its partners by 2030. The Demand/Supply scenario will be driven by projects such as:
- The NLNG Trains 7 and 8
- The Nigeria/Morocco pipeline project
- Ajaokuta-Kaduna-Kano (AKK) Natural Gas project
- Brass LNG, Floating LNG, OK LNG
- Trans-Niger Gas Pipeline
- Brass Fertiliser
- NSIA OCP Gas Project.
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Footnotes
1. International Energy Agency. (2021, May 18). Pathway to Critical and Formidable goal of net-zero Emissions by 2050 is Narrow but Brings Huge Benefits According to IEA Special Report. https://www.iea.org/news/pathway-to-critical-and-formidable-goal-of-net-zero-emissions-by-2050-is-narrow-but-brings-huge-benefits accessed 14th December.
2. https://www.nuprc.gov.ng/wp-content/uploads/2024/02/Upstream-Gaze-Magazine-Vol.-5-20-2.pdf accessed 20th June 2024.
3. https://www.nuprc.gov.ng/wp-content/uploads/2024/02/Upstream-Gaze-Magazine-Vol.-5-20-2.pdf accessed 20th June 2024.
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