Nigeria faces potential gas supply crisis by 2030, says NUPRC Chief

Nigeria may experience a significant gas supply crisis by 2030, with a potential shortfall of 3.1 billion cubic feet per day, according to Mr. Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

Komolafe warned of this possibility at the 2024 Annual Conference of the Association of Energy Correspondents of Nigeria (NAEC) in Lagos.

He said: “As the upstream industry regulator, the NUPRC, through the instrumentality of the Petroleum Industry Act, 2021 (PIA), is at the forefront of the drive for interventions required to realise the Decade of Gas by enabling investment in cleaner hydrocarbon development through gas development as well as driving programmes such as the Nigerian Gas Flare Commercialisation Programme (NGFCP) for flare elimination and gas monetisation to foster energy sufficiency and eliminate waste while simultaneously attending to the urgency of reducing carbon emissions.

“The demand for gas is expected to grow at a compound annual rate of 16.6% between 2020 and 2030, driven by major projects such as NLNG Train 7 and Train 8, the Nigeria/Morocco pipeline, and the Ajaokuta-Kaduna-Kano (AKK) Natural Gas Pipeline Project.”

However, even with increased production, the projected 12.2 billion cubic feet per day will not meet the ‘high case demand’ scenario of 22.2 billion cubic feet per day by 2030.

Komolafe emphasized the need for investment in cleaner hydrocarbon development and gas development to realize the Decade of Gas initiative.

He also highlighted the importance of eliminating gas flares and monetizing gas to foster energy sufficiency and reduce carbon emissions.

Farouq Ahmed, CEO of the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), echoed Komolafe’s concerns, stating thatkom Nigeria’s gas utilization deficits are significant, with 2.5 billion cubic feet of gas flared daily.

Mr. George Ita, the Director of Public Affairs, represented Ahmed, who expressed regret that Nigeria continues to flare about 2.5 billion cubic feet of gas daily despite significant gas utilisation deficits in the country.

He noted the need for a robust gas sector to secure domestic energy needs and position Nigeria as a reliable energy supplier for neighbouring countries.

He said: “This wasted resource could generate enough electricity for our energy needs. The Decade of Gas initiative seeks to end this waste, ensuring that by 2030 it has contributed significantly to our energy mix, adding up to 5,000 megawatts (MW) to the national grid and reducing our reliance on imported fuels.

“As we invest in gas infrastructure, we must also ensure we diversify our energy sources and reduce dependency on any single fuel,” Ahmed said, while assuring that the NMDPRA, through the PIA and regulations, the Authority is creating a predictable framework for investors, ensuring fair pricing, and encouraging competition.

Gabriel Ogbechie, Chairman of the conference and Group Managing Director of Rainoil Limited, noted that Nigeria’s abundant natural gas reserves present opportunities and challenges.

With the recent removal of petrol subsidies, there is growing urgency to scale up gas alternatives, offering clean and affordable energy solutions.

To address these challenges, industry leaders emphasized the need for investment in gas infrastructure, policy frameworks supporting CNG and LPG initiatives, and diversification of energy sources to reduce dependence on any single fuel.

The NUPRC and NMDPRA are working to create a predictable framework for investors, ensuring fair pricing and encouraging competition.