Since its inception in March 2021, the Nigeria ‘Decade of Gas’ policy, has shown dismal success with just 5 percent of its projected goals being met so far compared to the 85 percent year-on-year growth benchmark set by the government. Nonetheless, the government attributes the policy’s poor success to a myriad of constraints impeding gas production and use. These include implementation of VAT, a high exchange rate, a rise in the international price of commodities, a high cost of transportation, and local manufacturers basing gas prices on foreign pricing.
The government had already declared January 1, 2021 through December 31, 2030 to be Nigeria’s Decade of Gas. Within this period, the government hopes to increase gas output while also tackling energy poverty in the country. In addition, the government would work to industrialize the nation, generate employment, pull 100 million Nigerians out of poverty, and eventually put the economy on a road to prosperity. Notwithstanding the policy flaws, Mr. Ayo Cardoso, Southwest Zonal Coordinator of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), said that some progress had been made.
Primary goals of the Decade of Gas is to increase domestic gas use.
Mr. Cardoso, who give updates on the performance of the policy at the recently ended Sub-Saharan African International Petroleum Exhibition and Conference (SAIPEC) 2023 in Lagos, emphasized that there has been verifiable progress in the gas facilities dating back to 2017 – 2022. He further explained that the number of LNG terminals, which was only 5 in 2017, had increased to 42 in 2022, and the number of CNG terminals, which was only 97 in 2017, has increased to 112.
Although LPG station expansions have been stagnant between 500 and 585 since 2017, LPG plants rose from 2017’s 675 to 2022’s 13,038. Hence, Cardoso elaborated on how progress in the Decade of Gas has lagged well below official expectations. The primary goals of the Decade of Gas were to increase domestic gas use and keep existing gas reserves in service. He also said that Nigeria’s proven resource means the country’s gas sector has promising prospects.
Government has placed more of an emphasis on gas-to-power.
As elaborated by the Southwest Zonal Coordinator for the NMDPRA, the domestication of gas products like CNG and LPG has had a profound effect on the country’s economy. Pipelines, storage facilities, and processing facilities are only a few examples of the domestic infrastructure that have undergone recent, noteworthy advancements. He maintained that the National Gas Flare Commercialization Project in Nigeria could tap into 900 billion standard cubic feet (scf) of gas (NGFCP). While pointing out that Nigeria’s LNG sector has expanded tremendously, he noted that the government has placed more of an emphasis on gas-to-power since it devotes around 70% of its gas supply to this purpose.
In his urge to enhance the improvement, Cardoso advocates for the need of encouraging greater regional gas production and use on the home market. This, he said, would cushion the price of gas from market fluctuations and imported fuel. He also supported keeping tabs on gas producers to guarantee reasonable and comparable gas pricing. The NMDPRA zonal coordinator made comments on how the Decade of Gas program was being implemented and emphasized the need of creating a stable environment in order to encourage more players to participate in space.
Gas sector as a whole has created more employment.
Noting the importance of the Petroleum Industry Act (PIA), Cardoso said that it has established an enabling environment for the business, adding that new rules would be approved to pave the way for the gas market. According to him, the gas sector as a whole has created more employment, demanding more investment and empowering more individuals in the area. Similarly, he encourages government-private sector partnerships in order to achieve the common aim of developing the gas industry.