1. Status of the Gas-to-Power Sector in Nigeria

1.1. Nigeria is blessed with vast natural gas reserves, currently estimated at 208.3 trillion cubic feet, accounting for approximately 33% of Africa’s total gas reserves. The country is also the ninth-largest producer of gas in the world. This abundance positions Nigeria as a gas-rich nation with a remarkable life index of 94 years, indicating ample reserves for the foreseeable future. Gas remains the cleanest fossil fuel and continues to experience growing demand as the most preferred fossil fuel for power production. Nevertheless, gas as a fuel source has not been adequately commercialised in Nigeria due to challenges including gas flaring, which has resulted in significant losses and environmental damage.

1.2. Historically, Nigeria has heavily relied on gas for electricity generation, and it remains the primary source of power in the country. However, persistent challenges in electricity supply make Nigeria one of the nations with the lowest access rates globally, with over 90 million citizens lacking reliable power. If flared gas were properly harnessed, Nigeria could generate up to 2.5 GW of power from new and existing Independent Power Plants to boost the economy.

1.3. Recently, the nation has witnessed intensified efforts to reduce gas flaring as Nigeria aims to end gas flaring by 2030. The government introduced the Nigerian Gas Flare Commercialisation Programme (NGFCP) in 2016 to eliminate gas flaring through sustainable utilisation projects. This was reinforced by the Flare Gas (Prevention of Waste and Pollution) Regulations, 2018 and the Petroleum Industry Act (PIA), which prohibit gas flaring and impose penalties on offenders. These initiatives signify Nigeria’s commitment to efficiently utilise its gas reserves and harness related economic opportunities.

1.4. Nigeria’s energy landscape is largely thermal-based, constituting about 80% of its total energy mix, with hydroelectric power contributing the remaining 20%. Gas plays a dominant role in thermal generation but faces supply constraints that limit capacity utilisation. This underscores the need for strategic measures to strengthen gas availability and power generation. The Federal Government has implemented key policies and initiatives to drive progress, including:

  • Nigerian Gas Master Plan (2008): Stimulates the multiplier effect of gas in the domestic economy.
  • National Domestic Gas Supply & Pricing Policy (2008): Ensures low-cost gas access to spur growth.
  • Nigerian National Gas Policy (2017): Establishes a comprehensive legal and regulatory framework for gas sector investment.
  • National Gas Expansion Programme (NGEP) (2020): Reinforces domestic supply, stimulates demand, and mobilises finance through the CBN Intervention Fund.

1.5. Private sector involvement has led to measurable progress. Shell Nigeria Gas (SNG) completed the Agbara-Ota Capacity Project in 2019, increasing national gas distribution capacity by over 150%. The Ajaokuta–Kaduna–Kano (AKK) Gas Pipeline Project—capable of transporting two billion standard cubic feet of gas daily—is nearing completion. Similarly, the Dangote Complex, a $2 billion fertiliser plant with a 3.0 MTPA capacity, depends on natural gas as feedstock, highlighting the industrial significance of gas in Nigeria’s power value chain.