Leadership: Can Nigeria’s New Gas Price Regime Drive Fresh Investment ?

The Federal Government in December 2014 announced a new gas price regime to boost investment in the midstream oil sector and ultimately help in stabilizing power supply. In this analysis, Chika Izuora takes a look at the country’s gas deposit, investment initiative and the new drive to enhance electricity supply

Nigeria is endowed with abundant natural gas resources, which in energy terms, is in excess of the nation’s proven crude oil reserve. Nigeria is renowned for its crude oil production and with approximately 187 tcf (Trillion Cubic Feet) of proven gas reserves and a 600 tcf unproven gas reserves, Nigeria can at best be described as a gas province with oil.

Currently, Nigeria is in the 9th position among the countries that have the largest proven gas reserves in the world. Though blessed with abundant gas resources, not much of it has been harnessed with the nation’s primary focus being on crude oil production, a product that accounts for over 90 per cent of its national income.

Current reserved estimate of the Nigerian gas is with about 50/50 distribution ratio between Associated Gas (AG) and Non Associated Gas (NAG) while only a small fraction of this quantity is currently being utilised.
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