On Monday, the Federal Government revealed that an annual investment of approximately $20 billion will be essential to realize the envisioned expansion of gas projects in Nigeria, fostering a deeper utilization of gas across the nation.
This announcement was made during the Decade of Gas Action Plan Dialogue, hosted by the African Initiative for Transparency, Accountability, and Responsible Leadership in Abuja, as conveyed by the Nigeria Extractive Industries Transparency Initiative (NEITI).
Ogbonnaya Orji, the Executive Secretary of NEITI, emphasized that the successful execution of the government’s gas utilization policy hinges on a strategic and ambitious commitment to invest in gas infrastructure.
He emphasized that such investment must encompass enhancing connectivity from upstream facilities through processing, power generation plants, and various end uses.
Orji highlighted the importance of allocating around $20 billion annually to bridge Nigeria’s gas infrastructure, acknowledging the need for clarity in prioritizing specific aspects of this substantial investment amidst the evolving landscape of fossil fuel funding.
He underlined the significance of aligning Nigeria’s gas utilization policy with the country’s energy transition plan, and underscored Nigeria’s position as possessing Africa’s largest gas reserves, ranking ninth globally.
NEITI’s reports confirmed that Nigeria’s gas reserves exceed 200 trillion cubic feet, a fact consistent with the provisions outlined in the Petroleum Industry Act of 2021.
The Act marked a pivotal advancement in the governance and fiscal frameworks governing the growth of the gas sector.
Orji urged the government to promptly formulate a comprehensive national gas utilization policy, one that precisely outlines the responsibilities of industry stakeholders, government entities, and investors involved in the plan’s implementation.
He further recommended developing a market-driven gas utilization plan that can effectively translate gas-related strategies into sustainable economic development.
Louis Ogbeifun, the Executive Director of the African Initiative for Transparency, Accountability, and Responsible Leadership, pointed out that while many countries are gradually moving away from fossil fuels, Nigeria’s focus on leveraging its abundant natural gas reserves remains integral to its energy landscape.
Recognizing the substantial financial outlay required for this endeavor, Ogbeifun expressed concern over funding gas projects in a cost-efficient manner, especially considering the challenges posed by asset loss, crude theft, currency depreciation, and the capital-intensive nature of sustainable energy alternatives.
In the short term, Ogbeifun suggested that the Federal Government should consider increasing crude oil production to generate revenue, which could then be channeled towards diversification and investment in alternative energy sources.
Despite the ongoing transition away from fossil fuels, he noted that natural gas, while still part of the fossil fuel family, offers a comparatively cleaner energy source than coal or petroleum.
Ogbeifun concluded by emphasizing the importance of carefully strategizing Nigeria’s gas projects and funding mechanisms to achieve long-term sustainable energy goals.
