Natural gas is a naturally occurring fuel that is a mixture of gaseous hydrocarbons and is very efficient for energy-intensive utility. It comparatively emits low levels of carbon dioxide compared to other traditional fossils like Low Pour Fuel Oil (LPFO), diesel, and coal.
The fuel is a hydrocarbon mixture consisting primarily of saturated light paraffins such as methane and ethane, both of which are gaseous under atmospheric conditions. Natural gas also may contain other hydrocarbons, such as propane, butane, pentane, and hexane.
Nigeria as an oil-producing nation has a proven gas reserve of about 209.5 trillion cubic feet (Tcf) which accounts for three per cent of the world’s total natural gas reserves and makes Nigeria the ninth largest holder of natural gas in the world. A statistical review of world energy by BP also shows that as of June 2022, Nigeria holds the largest natural gas reserves on the African continent and was ranked sixth globally among exporters of liquefied natural gas (LNG) in 2021.
According to an energy expert, Niyi Ojo, natural gas has emerged as a fundamental driver of economic growth globally and Nigeria is no exception. He said that as Africa’s largest oil producer, Nigeria possesses vast natural gas reserves that have the potential to transform the country’s energy sector and drive economic diversification.
He said, ‘‘Despite this immense potential, significant amounts of natural gas production in Nigeria are either re-injected or flared as some of Nigeria’s oil fields lack the infrastructure to capture the natural gas produced with oil, known as associated gas. According to the most recent data by the World Bank’s Global Gas Flaring Reduction Partnership (GGFR), Nigeria flared about 5.318 billion cubic meters (or 188 Bcf) of natural gas in 2022, making Nigeria the ninth-highest natural gas-flaring country in terms of annual natural gas-flaring volume. Nigeria has traditionally flared a substantial portion of its natural gas due to limited infrastructure for harnessing, transporting, and utilising it effectively. However, ambitious government initiatives and partnerships with private organisations have propelled the country towards becoming a leading player in the global natural gas market.’’
Recently, natural gas emerged as a key component in Nigeria’s energy mix, offering significant growth opportunities for businesses across sectors. The development and expansion of Nigeria’s natural gas pipeline infrastructure network play a crucial role in facilitating the efficient transportation of this valuable resource across the country. With an evolving natural gas pipeline infrastructure network, Nigeria is poised to reap the benefits of this abundant resource, providing substantial opportunities for businesses, and propelling overall growth.
In 2018, the federal government launched the Nigerian Gas Master Plan (NGMP) outlining strategic goals, including increasing domestic gas supplies, reducing gas flaring, and stimulating economic growth through gas-based industries. This was done following the need to build a robust gas infrastructure network to fully exploit the potential of its natural gas reserves, diversify its energy mix, and support economic growth.
‘‘Currently, the main natural gas pipeline transportation infrastructure in Nigeria is the Alakiri–Obigbo–Ikot Abasi Pipeline (the Eastern Network), the Escravos–Lagos Pipeline System (the Western Network), and the ongoing Ajaokuta–Kaduna–Kano gas pipeline connecting the North. These pipelines are all owned by the Nigerian Gas Processing and Transportation Company (NGPTC), a subsidiary of the Nigerian National Petroleum Corporation Limited (NNPC). Recognising the need for private investments to drive the needed expansion and growth within the market, the government sanctioned the licences for franchises and gas production deals for independent players to finance and develop natural gas pipelines, gas-processing facilities, and other related infrastructure in the Nigerian oil and gas space. Some of these private companies include Gaslink Nigeria Limited, owned by Axxela Limited, Shell Nigeria Gas, Falcon Corporation, Savannah Energy, PowerGas, among others who are all licensed to operate in the development of natural gas distribution infrastructure in specified markets on a build, own, operate and transfer basis as well as to ensure availability of natural gas to businesses and players across the economic and manufacturing value chain,’’ Ojo said.
Another expert, Collins Eze said that the availability of an extensive natural gas pipeline infrastructure network has immensely contributed to the power generation sector in Nigeria. According to him, as an alternative to costly and unreliable diesel and petrol fuels, natural gas offers a cleaner, cheaper, and more reliable source of energy for businesses, stimulating industrial growth and attracting foreign direct investment.
According to data from the NNPCL, gas-based POWER generation accounts for over 80% of the country’s total electricity production, significantly reducing operational costs for businesses.
He said, ‘‘To harness and monetise its substantial natural gas reserves, Nigeria embarked on an ambitious plan to develop a robust pipeline infrastructure network. The goal is to efficiently transport natural gas from production fields located primarily in the Niger Delta region to various demand centres across the country. The network includes a vast pipeline system, processing plants, and storage facilities. This has led to significant progress with the completion and ongoing construction of several pipelines that connect natural gas production centers with domestic consumers, industries, and export markets.’’
According to statistics, one such project is the West African Gas Pipeline (WAGP), a 678-kilometer pipeline network inaugurated in 2010 that links Nigeria’s gas-rich Niger Delta region with neighboring countries, including Benin, Togo, and Ghana. The WAGP serves both domestic and export markets, enabling the export of natural gas to international markets while providing vital energy resources to West African nations. This project is owned and financed jointly by Chevron West African Gas Pipeline Ltd (36.9 per cent ); Nigerian National Petroleum Corporation Limited (24.9 per cent); Shell Overseas Holdings Limited (17.9 per cent); and Takoradi Power Company Limited (16.3 per cent), ‘Société Togolaise de Gaz’ (two per cent) and ‘Société BenGaz S.A. (two per cent).
The Ajaokuta-Kaduna-Kano (AKK) gas pipeline is one of the flagship projects that will stretch approximately 614 kilometers upon completion. Developed by the NNPC as part of Nigeria’s Gas Master Plan, the ambitious $2.8 billion worth project aims to connect the southern gas fields to the northern region, stimulating industrial development and power generation in a bid to utilise the country’s surplus gas resources for power generation as well as for consumption by domestic customers. This project also forms part of the proposed 4,401 km-long Trans-Saharan Gas Pipeline (TSGP) to export Nigeria’s natural gas to customers in Europe. The 614km-long pipeline will originate at the Ajaokuta terminal gas station (TGS) in the Kogi State and pass through Niger, the Federal Capital Territory (FCT), and Kaduna to terminate at a gas station at Kano.
Data analyst and energy sector expert, Amos Bulus said that when completed, the Ajaokuta–Kaduna–Kano (AKK) pipeline will transport up to 3,500 million cubic feet (mcf) of gas a day from various gas gathering projects in southern Nigeria. ‘‘Hydrocarbon liquids will be processed at Ajaokuta to produce liquefied petroleum gas (LPG), while the remaining gas will be transported to supply feedstock for new power plants and petrochemical facilities at Abuja, Kaduna, Kano, and Katsina. Also, there exists the Obiafu-Obrikom to Oben (OB3) Gas Pipeline project, a 48-inch 127-kilometer, commissioned by Nigerian Gas Company (NGC) with a mission to be completed in 2018 to connect the eastern and western regions of Nigeria,’’ he said.
