Nigeria’s midstream gas regulator has renewed its commitment to strict enforcement of regulations. It is focusing on expanded distribution networks. These efforts serve as a catalyst for manufacturing growth.
At a Port Harcourt facility inspection, NMDPRA CEO Saidu Mohammed emphasised that robust gas infrastructure is crucial. It is essential to the government’s industrialisation drive.
His remarks align with the Federal “Decade of Gas” initiative launched in 2021. This initiative aims to harness Nigeria’s vast gas reserves for domestic economic growth.
Nigeria has proven natural gas reserves over 210 trillion cubic feet (Tcf). It is the largest in Africa. Nigeria has a clear opportunity to use gas as a cheaper and cleaner fuel for industry.
Mohammed noted that making gas widely available would cut production costs for manufacturers. It would also lower consumer prices. This echoes global trends that see natural gas as a transition fuel for cleaner industry.
Mohammed highlighted that industries “thrive when gas is available.” He explained that gas burns cleaner than diesel or petrol. It greatly reduces energy costs.
Currently Nigeria produces about 8 billion standard cubic feet per day (Bcf/d) of dry gas, but only roughly 1.5 Bcf/d is consumed domestically. The rest is mostly exported as LNG.
Experts note this mismatch: Nigeria sits on the world’s top ten gas reserves. However, it ranks only around twentieth in gas output.
By contrast, countries that have built out domestic gas pipelines see much greater economic benefit. They also gain from distribution for power, industry, and households.
To close this gap, the government’s strategy is to deepen internal gas utilisation alongside exports.
Projections under the Decade of Gas programme expect national gas demand to soar from about 4.9 Bcf/d in 2020 to 22.6 Bcf/d by 2030, with over half destined for domestic use.
Achieving this will require massive investment in pipelines, compressor stations and cylinder supply.
Regulatory reforms and licensing. The 2021 Petroleum Industry Act (PIA) restructured Nigeria’s energy regulators and explicitly assigned gas infrastructure development as a priority.
Under the PIA, the Department of Petroleum Resources’ midstream functions were transferred to the new NMDPRA.
As part of the rollout, Mohammed confirmed that NMDPRA is “mapping the entire country” to allocate gas distribution licences.
Licensed distributors will operate in defined franchise areas (cities or industrial zones), promoting clear responsibilities and avoiding overlapping networks.
Where large transmission pipelines do not reach, the regulator plans to deploy “virtual” distribution using Compressed Natural Gas (CNG) trucks.
These smaller-scale operators (for example, pipeline-connected hubs that feed local clusters via CNG) are critical to reaching remote industrial parks.
The authority pledges to support these and other midstream firms with transparent technical and commercial frameworks. It will use all powers under the PIA to ensure gas flows at the lowest possible cost.
Building the network. To deliver on this vision, new pipelines and facilities are being built. The flagship Trans-Nigeria Gas Pipeline project, especially the Ajaokuta–Kaduna–Kano (AKK) leg, is under construction.
When complete it will stretch about 614 km from the North-Central gas fields through Abuja, Kaduna and end at Kano.
The AKK alone is budgeted at roughly $2.9 billion for 36–40″ diameter line that can carry 3.5 billion cubic metres per year.
Further phases will link gas from the Qua Iboe export terminal in the south to eastern and central states. These inter-regional trunks, once in service, will transform Nigeria’s transmission capacity.
At present, industrial gas distribution remains fragmented. For example, Shell Nigeria Gas (SNG) operates a 138 km network. This network serves Ogun, Abia, and Port Harcourt areas. Much more is needed if every factory is to be served.
Private initiatives also play a key role. At Port Harcourt, Mohammed’s team inspected plants of Stockgap Fuels and Central Horizon Gas, among others.
Stockgap’s chairman Dr. Stanley Ohamarije announced plans to produce 5 million LPG (liquefied petroleum gas) cylinders over five years.
This complements the government’s target of 10 million cylinders to boost home and industrial gas use. Stockgap’s plant can turn out about 2,500 cylinders per hour, indicating significant scale.
Central Horizon Gas, a downstream infrastructure firm, said it is expanding pipelines and processing plants nationwide to feed industries.
Both executives credited regulatory support – such as timely licences – for enabling their scale-up. They noted that global industry increasingly relies on gas: as CHGC’s MD Kehinde Alabi put it,
“Natural gas remains a major driver of industrial growth globally”.
Their efforts create new jobs (in manufacturing, construction and energy services) and help lower Nigerians’ energy bills.
Economic and industrial impact. Deeper gas utilisation has multiple economic payoffs. For manufacturers, switching from diesel or fuel oil to pipeline gas can cut energy costs by 20–30% or more. This change improves competitiveness.
Power plants fuelled by gas are more reliable and cheaper to run than diesel generators. More available gas also spawns new sectors. For instance, Nigeria’s only large gas-based fertilizer plant (the Notore urea complex) was idle for years due to erratic feedstock. However, wider gas supply could revive such industries.
Likewise, glass, ceramics and steel makers can use process gas instead of costly imports. Cumulatively, the government sees industrialisation as key to job creation and economic diversification .
The broader gas strategy goes beyond pipelines. The Decade of Gas initiative includes fleet conversion programs and the establishment of CNG stations. These efforts aim to replace petrol and diesel vehicles, with a goal of 1 million cars on CNG by 2027.
That will reduce petroleum imports and carbon emissions. The recent gas infrastructure projects (like the AHL and ANOH processing plants and the 23.3 km OB3 pipeline) are expected to add roughly 25% more gas to the domestic market.
Meanwhile, efforts like the Nigerian Gas Flare Commercialisation Programme (NGFCP) are capturing flared gas. NUPRC reports that 42 companies will tap 250–300 million cubic feet of flared gas per day. This will produce 170,000 tonnes of LPG and 3 GW of power for some 1.4 million homes.
This flare‐gas scheme alone is projected to attract $2 billion. It is expected to create over 100,000 jobs. This highlights how gas projects boost the economy.
Challenges and outlook. Nevertheless, Nigeria faces hurdles. Building and maintaining pipelines is capital-intensive and vulnerable to vandalism.
Completing the AKK pipeline has already been delayed, and new plants require tens of millions in investment. Regulatory clarity must be sustained. The PIA has streamlined policy and created a dedicated midstream regulator. Yet, implementation is ongoing.
On the demand side, high prices for equipment (cylinders, burners) could slow adoption. The NMDPRA notes it does not supply appliances. It only sets safety standards.
Finally, gas networks will only lower prices if supply grows; as Mohammed warned, scarcity inevitably pushes costs up .
In summary, Nigeria is in the midst of a cautious but determined gas sector expansion. The NMDPRA’s emphasis on compliance and transparent, franchise-based distribution is intended to attract long-term investors and protect consumers.
The government is linking these efforts to the Decade of Gas framework. It aims to transform stranded gas reserves into affordable energy. This energy will power industries and stimulate jobs.
If successful, the strategy could reposition natural gas as a “fuel for national development.” It could help Nigeria diversify its economy away from oil.
For now, the combination of regulatory push, private investment, and infrastructure projects is evident. This suggests significant progress toward that goal over the coming decade.
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