Nigeria's Decade of Gas Faces Significant Challenges Ahead

Nigeria's Decade of Gas initiative, launched in 2021 to transform its economy through natural gas by 2030, is facing significant challenges. According to a new report by the Natural Resource Governance Institute (NRGI), Nigeria will likely miss its target of adding 4.6 billion cubic feet per day (bcf/d) of new gas production by 70%. The current estimate suggests that only about 1.3 bcf/d of new gas production is expected by 2030, which represents just 30% of the original target.

The NRGI report points out that most of the incremental volumes are likely to be channeled towards liquefied natural gas (LNG) exports rather than domestic consumption. This could limit the contribution of the Decade of Gas to Nigeria's energy access and industrialization objectives. In fact, only between 20 and 30% of the new gas production is expected to be available for domestic use.

The report highlights weak infrastructure gaps and financing constraints as major challenges to expanding gas supply for the local market. It also notes that inadequate midstream infrastructure has limited the ability of producers to bring new gas projects online and connect supplies to domestic consumers. The NRGI warns that external demand for Nigerian gas could weaken in the latter half of the 2030s and beyond as major consuming markets increasingly shift away from fossil fuels.