Nigeria Focus – Natural Gas
Nigeria’s natural gas reserves
Nigeria has the largest natural gas reserves on the continent – reserves that it battles to capitalise on due to limited infrastructure. It is interesting to note that all of the current gas reserves were found while searching for oil, according to the petroleum ministry. The government wants to creative incentives for energy companies to explore specifically for gas, and in this regard, the gas will start to ‘decouple’ from oil in terms of investment.
Nigeria’s gas reserves account for 2.8% of the global total, with the region featuring as the eighth largest natural gas reserve holder in the world. It has been suggested that if investment is focused on exploration for gas, rather than a coincidental find in the search for oil, the reserves have the potential to be as high as 600 trillion cubic feet. The country’s natural gas reserves are projected to last over 100 years.
Security and regulatory issues
The natural gas sector is impacted by the security and regulatory issues that affect the region’s oil industry, natural gas that is associated with oil production is mostly flared. The following developments stand to accelerate growth in the sector:
- The development of regional pipelines
- The expansion of LNG infrastructure
- Policies to ban gas flaring
Energy experts estimate that Nigeria has lost $2bn in potential revenue from gas flaring on an annual basis, although the Nigerian National Petroleum Corporation (NNPC) has put this number at $2.5bn in a previous estimate.
Gas Revolution Master Plan
The government’s Gas Revolution Master Plan, launched in 2011, is intended to bring an end to gas flaring in the country. The overall strategy includes:
- Attracting $25bn worth of investment into developing the country’s gas infrastructure
- Create around 600 000 new jobs
- Increase domestic gas supply to 10 billion cubic feet per day by 2010
It was reported however, that actual investments (since the 2011 launch) have not been very forthcoming, with some companies postponing and cancelling projects.
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