The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, has highlighted a significant shortfall in Nigeria’s compressed natural gas (CNG) infrastructure, emphasizing that the nation only has fewer than 50 CNG compression stations to cater to its population of 200 million. This statistic starkly contrasts with the federal government’s ambitions under the Presidential Compressed Natural Gas Initiative, which aims to provide CNG as a more affordable alternative to conventional fossil fuels such as petrol and diesel. During the Nigeria Association of Energy Correspondents conference in Lagos, Ahmed pointed out that energy security remains a vital component for the nation’s economic growth. Given that Nigeria flares roughly 2.5 billion cubic feet of gas each day—a resource that could be harnessed for electricity generation—the inefficiency is alarming. Ahmed underscored the Decade of Gas initiative as a transformative plan aimed at eliminating this gas wastage and significantly increasing gas’s contribution to the national energy mix by 2030.
Amid these developments, Ahmed argues that Nigeria must prioritize diversifying its energy sources to reduce dependence on any singular fuel type. He notes the glaring insufficiency of around 3,000 Liquefied Petroleum Gas (LPG) plants compared to the nation’s vast energy needs. Ahmed advocates for the development of a robust gas sector that preserves domestic energy security while simultaneously positioning Nigeria as a reliable energy supplier for neighboring countries. This, he believes, will enhance regional energy security and encourage economic collaboration. Reiterating the importance of the Presidential CNG initiative, he views it as a pivotal policy for strengthening Nigeria’s energy security while reducing its reliance on oil.
Discussing the broader context of Nigeria’s energy landscape, Ahmed referred to the national Energy Transition Plan launched in 2022, which strategically incorporates gas as a transitional fuel. By transitioning from carbon-intensive energy sources to cleaner alternatives like LPG and CNG, Nigeria aims to align itself better with global energy trends. He emphasized that energy security and international geopolitics present notable challenges that Nigeria must tackle as it embarks on this energy transition. With proven reserves of over 209 trillion cubic feet of gas—the largest in Africa and one of the top ten globally—Nigeria has the potential to significantly pivot its energy narrative away from overwhelming reliance on crude oil toward a cleaner future.
Emphasizing the environmental advantages of natural gas, Ahmed stated that it produces 50% less CO2 than coal and 30% less than oil, making it an ideal interim energy source to facilitate a low-carbon future. Furthermore, he pointed out that embracing natural gas could mitigate the intermittency issues associated with renewable energy sources like wind and solar. This narrative posits that the shift towards gas is not merely an energy transition; it is framed as a critical movement towards developing a reliable, cleaner, and more sustainable energy supply for Nigeria.
However, the substantial financial investment needed to bolster Nigeria’s gas infrastructure cannot be overlooked. Ahmed indicated that the estimates for this investment reach into the billions of dollars. The enactment of the Petroleum Industry Act in 2021 has created a foundation that can attract necessary investments through better fiscal terms and regulatory clarity. Additionally, the establishment of the Nigerian Midstream and Downstream Gas Infrastructure Fund seeks to promote sector growth by enhancing financial access and fostering partnerships at both local and international levels.
On a global scale, Ahmed expressed concerns regarding the increasing push for the decarbonization of energy sources away from fossil fuels, which could exert added pressure on Nigeria’s already complicated energy landscape. He warned that with Nigeria’s historical dependence on imported fuels and oil as its primary foreign exchange earner, the country risks facing severe economic repercussions if the transition away from fossil fuels accelerates. In conclusion, Ahmed’s insights suggest that while Nigeria stands at a critical juncture in its energy evolution, effectively navigating the issues of infrastructure, investment, and international trends will be vital in achieving a sustainable energy future.
