‘Despite Huge Reserves, Natural Gas Expansion Faces Major Hurdles’

Despite possessing over 200 trillion cubic feet (Tcf) of proven natural gas reserves, Nigeria continues to struggle with underutilisation, infrastructure deficits, and investment roadblocks in its gas sector.

The chairman of the National Gas Expansion Programme (NGEP), Prof. Mohammed M. Ibrahim, who disclosed this at the 6th West Africa LPG Expo on Tuesday in Lagos, highlighted critical challenges impeding Nigeria’s efforts to maximise its gas potential.

Ibrahim pointed to inadequate infrastructure, environmental concerns, and policy inconsistencies as major barriers to fully harnessing natural gas for domestic use and export.

Explaining further, the chairman said Nigeria’s gas fields, including Bonga, Amenam, and Utorogu, remain underdeveloped due to aging pipelines, processing constraints, and political instability, adding that, the lack of sufficient midstream and downstream infrastructure means many remote areas still lack access to gas, limiting its role in power generation, industrial production, and economic diversification.

“High capital costs for exploration, pipeline construction, and processing facilities have further slowed progress. Although the Petroleum Industry Act (PIA) 2021 established a Midstream and Downstream Gas Infrastructure Fund to enhance financing, challenges persist due to inadequate in-country manufacturing capacity for critical machinery and equipment. Environmental degradation in the Niger Delta also remains a pressing issue. Gas flaring, oil spills, and soil contamination have sparked tensions with local communities, who often feel marginalized and inadequately compensated,” he added.

While government policies, including tax incentives and import duty waivers, aim to attract foreign investment, regulatory uncertainties and slow implementation continue to hinder investor confidence, even as Ibrahim stressed that Nigeria’s reliance on a single gas stream—Compressed Natural Gas (CNG)—poses risks to long-term energy security, advocating for a broader approach to gas utilisation.

To unlock Nigeria’s gas potential, the chairman called for increased public-private partnerships, local capacity-building, and strict adherence to regulatory frameworks. Expanding small-scale gas distribution centers and investing in local manufacturing of equipment could accelerate development and reduce costs, he affirmed.

“The National Gas Expansion Programme (NGEP) is positioned as a catalyst for these reforms, aiming to shift Nigeria from an oil-dependent economy to a diversified, gas-powered future. However, without decisive action to address infrastructure deficits, environmental concerns, and investment constraints, the country risks missing out on the full benefits of its vast gas reserves,” he stated.

SOURCE : LEADERSHIP

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