The Nigeria Extractive Industries Transparency Initiative (NEITI) on Monday said that the country would require about $20 billion annually to bridge the country’s gas infrastructure gap.
Nigeria has over 200 TCF of proven gas reserves and about 600 TCF potential molecules, but has been unable to take them off the ground due to low investment in the sector.
Speaking at a policy dialogue on Nigeria’s ‘Decade of Gas’ plan organised by the African Initiative for Transparency, Accountability and Responsible Leadership (AfriTal) and Natural Resource Governance Institute (NGRI) in Abuja, Executive Secretary, NEITI, Dr Ogbonnaya Orji, stated that said Nigeria has the largest gas reserves in Africa and the ninth-largest globally.
However, Orji noted that the Petroleum Industry Act (PIA) has provided the most significant progress for the gas sector in strengthening governance and providing fiscal frameworks for the sector’s growth.
“Nigeria has the largest gas reserves in Africa and the ninth largest globally. NEITI reports put the country’s gas reserves at over 200 trillion cubic feet. NEITI’s position is consistent with the provisions of the PIA passed in 2021. The PIA provided the most significant progress for the gas sector in strengthening governance and providing fiscal frameworks for the sector’s growth.
“We call on the government to urgently put a national gas utilisation policy in place. Such policy needs to be clear on the specific roles of the industry, government, and investors in implementing the plan.
“Similarly, the gas utilisation plan should show the market-driven opportunities that would successfully translate the gas plans into sustainable economic development,” Orji said.
For the gas utilisation policy to work, the NEITI helmsman noted that there is a compelling need for deliberate ambitious investment in its infrastructure. This, he said, includes specific connectivity across upstream facilities to processing, power plants, and other end uses.
“ The network code provides a framework through third-party access to resolve some of the connectivity issues, but to a large extent, achieving the desired gas expansion will require an estimated $20 billion annually to bridge Nigeria’s gas infrastructure. Given the shrinking fossil fuel investment landscape, clarity is required of the infrastructure to be prioritised,” Orji added.
According to him, the right policy and politics will send strong positive signals to investors to move into the gas sector.
He stressed that the work of the experts would include mapping of infrastructure gaps, prioritised gas demand and supply projects, gas demand and supply projections, and private versus public sector financing required.
In addition, he said the deregulation policy on gas pricing to align with the fiscal adjustments within the PIA 2021 should be encouraged .
Orji noted that experts have argued that a market-based pricing regime, where producers and consumers are free to engage in transactions without government interference, would generate more government revenues and free up capital for government to spend in other weaker sectors of the economy.
He stated that NEITI strongly aligns with the federal government’s commitment to global emission reduction and methane abatement.
“This policy remains critical to achieving Net Zero emissions and arresting adverse impacts on the global environment,” he said.
In his remarks, AfriTal’s Dr Louis Ogbeifun, noted that over the years, Nigeria has behaved like the prodigal son by exporting mineral resources to earn dollars for consumption without savings, reinvestment in revenue, and employment generation ventures.
He argued that this model has buried many industries in the economic graveyards, created employment overseas, and worsened unemployment and poverty in Nigeria.
These analogies, he said, reflect the contradiction of being a rich but poor nation.
“It is in a bid to reverse the highlighted negative narrations, achieve energy accessibility, affordability, and sustainability as a country that the 2021-2030 government legislation tagged the ‘Decade of Gas Action Plan (DofG)’ was enunciated.
“If the government’s intentions were effectively implemented, Nigeria is expected to witness a vast gas infrastructural development during the period,” he said.
He noted that with the dwindling international funding support and the expulsion of foreign interests from some parts of the continent, which is spreading to other countries in the sub-region, citizens must be worried about how to fund and birth the gas projects in a manner that would be cost-efficient, cost-effective, and less hazardous to women, youths and the rest of our citizens.
Also speaking, Lead, Domestic Energy Transition, NGRI, Aaron Sayne, said Nigeria would need about $1 trillion to execute Nigeria’s energy transition programme.
He noted that foreign investment had continued to dry up in the oil and gas sector, noting that the funding available 10 years had halved.
He said that although local oil companies should ordinarily step up , the problem was that big time funding for the sector was no longer available. He urged the government to therefore approach public lending institutions which may still be available.
