Nigeria May Face Gas Supply Shortfall By 2030
By Frederick Wright
Nigeria May face gas supply shortfall of 3.1 billion cubic feet per dad (bcf/d) by the next six years, if rapid efforts are not put in place to immediately upgrade gas infrastructure and increase investments in renewables.
Already, stakeholders who gathered at the NAEC Energy Conference 2024 in Lagos, yesterday estimated that the nation would require investments to the tune of $20 billion yearly to bridge its infrastructure deficit challenges.
Speaking at the event, the Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, said growth in gas demand currently outstrips supply, driven largely by growth in domestic demand which was enabled by an improvement in domestic supply obligation.
Komolafe, who was represented at the event by the Director, Lagos Regional Officer, Paul Osu said
the demand for gas is expected to grow at a compound annual growth rate of 16.6 per cent per year and Nigeria may face “…an impending gas supply crisis with potential shortfall of 3.1 bcf/day by 2030” in the ‘Base Case Demand and Supply’ scenario.
Stating that natural gas production is projected to increase from 8.0 bcfd in 2020 to 12.2 bcfd in 2030 driven by major projects such as NLNG Train 7 & Train 8, Nigeria/Morocco pipeline, Ajaokuta-Kaduna-Kano (AKK) Natural Gas Pipeline Project, among others in the ‘high case supply’ scenario, Komolafe said this will not meet the ‘high case demand’ scenario projected at 22.2 bcfd in 2030.
He said: “In just a decade, the demand landscape could change exponentially, especially if the power sector challenges are resolved. The import of this is to showcase opportunities in gas development in Nigerian upstream sector and the need to complement hydrocarbon developments with renewables,”
Emphasizing that the NUPRC is positioned to create a favourable operating environment, he urged the investors to leverage sustainability mandates in the Petroleum Industry Act (2021) as well as the generous fiscal incentives.
In the same vein, the Chief Executive Officer, Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) Farouq Ahmed, represented by Director, Public Affairs, George Ene-Ita, said energy security is crucial for Nigeria’s economic growth.
He said despite having huge gas utilization deficits, Nigeria still flares about 2.5 billion cubic feet of gas daily.
Ahmed said: “This wasted resource could generate enough electricity for our energy/power needs. The Decade of Gas initiative seeks to end this waste, ensuring that by 2030, has contributed significantly to our energy mix, adding up to 5,000Mega Watts (MW), to the national grid and reducing our reliance on imported fuels,”
He added: “As we invest in gas infrastructure, we must also ensure we diversify our energy sources and reduce dependency on any single fuel,”
He berate a situation whereby the number of LPG refilling plant in the country is less than 3,000, while CNG compression station is less than 50 for a country of 200 million citizens.
Ahmed therefore stressed the need to develop a robust gas sector not only to secure the domestic energy needs, but also position the nation as a reliable energy supplier for neighbouring countries, thereby enhancing regional energy security and reduce the dependency on oil.
He assured that the NMDPRA is committed to fostering transparency, fair and investment-friendly environment. “Through the PIA and regulations, we are creating a predictable framework for investors, ensuring fair pricing, and encouraging competition,” he said.
Chairman of the conference and Group Managing Director, Rainoil Limited, Gabriel Ogbechie, said our country blessed with abundant natural gas reserves, but stands at crossroad of opportunities and challenges, adding that, “the decisions we make today regarding the role of gas in our energy landscape will shape our nation’s economic and environmental future”.
He quoted the the NEITI report as indicting that about Nigeria requires approximately $20 billion yearly to bridge its gas infrastructure deficit from pipelines to processing plants.
According to him, with the recent removal of petrol subsidy, there is a growing urgency to scale up gas alternatives, offering clean, affordable energy solutions for the nation, energy security, and building a resilient energy system.
Noting that government aims to increase power generation through gas fired plants, he said, to make this a reality, we need to invest heavily in gas infrastructure while tackling issues like pipeline vandalization.
“We need to continue to attract and provide investment, particularly in green financing to develop our gas infrastructure.,”
He stressed the need to strengthen the policy frameworks that support the scaling of CNG and LPG initiatives for both transportation and domestic use.
