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Tag: liquefied natural gas (LNG)

  • NLNG Signs GSAs with Six Suppliers to Boost Gas Supply to Bonny Plant

    NLNG Signs GSAs with Six Suppliers to Boost Gas Supply to Bonny Plant

    NLNG has announced the signing of long-term Gas Supply Agreements (GSAs) with six third-party gas suppliers in a strategic move to strengthen feedgas supply to its existing trains on Bonny Island and support the Company’s expansion drive.

    The long-term agreements, with options for extension, were signed with SNEPCO-SUNLINK HI project, TEPNG AMNI JV IMA project, NNPCL-First E&P JV, SNG NGML, OANDO- NNPC E&P, and TEPNG JV Ubeta. The suppliers will deliver an estimated 1,290 million standard cubic feet per day (mmscf/d) or 13.3 bcm/yr of feedgas to NLNG. The volumes will be gradually scaled up over a period of time.

    The new GSAs significantly boost feedgas availability, enhancing NLNG’s capacity to meet its commercial commitments while laying the groundwork for expansion. This development is aligned with the Federal Government’s Decade of Gas initiative, which places natural gas at the centre of Nigeria’s industrialisation and energy transition agenda.

    Speaking on the agreements, NLNG’s Managing Director and Chief Executive Officer, Philip Mshelbila, described the milestone as the culmination of sustained efforts by shareholders and stakeholders to address long-standing gas supply constraints. He noted that in recent years, NLNG’s operations had been significantly impacted by pipeline disruptions, including vandalism and sabotage, affecting upstream gas availability.

    “NLNG recognises the challenges that the consequent insufficiency of gas supply has caused to its long-term buyers, customers, shareholders and more widely to the Nigerian economy. With the new GSAs, NLNG is optimistic about a sustainable gas supply for the future and remains grateful for the continuing support of its buyers and other stakeholders. It also looks forward to a successful future together.

    “We could not have achieved this without the deliberate and concerted efforts of our shareholders and stakeholders in the energy industry in Nigeria. These agreements are a turning point in NLNG’s journey, restoring reliability of supply and ensuring we remain firmly on the path of growth and expansion,” Mshelbila said.

    He further explained that the new GSAs mark a historic shift for NLNG, which since inception had relied primarily on legacy shareholder joint venture affiliates for gas supply. He said with the recent divestment of onshore assets by several International Oil Companies (IOCs) to non-shareholder entities, NLNG is now procuring feedgas from diverse third-party suppliers to meet its growing needs for both Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs) production.

    The landmark GSAs are a game-changer for Nigeria’s gas industry, enhancing local gas production capacity and improving gas supply, which are critical to the country’s energy security, industrialisation aspirations, and economic growth.

  • Vandalism threatens Nigeria LNG’s N727bn dividends in 2025

    Vandalism threatens Nigeria LNG’s N727bn dividends in 2025

    …As only two of six trains operational- Mshelbila

    The Nigeria LNG Limited (NLNG) has announced that only two of its six trains are currently operational, thanks to the activities of pipeline vandals.

    The development is a threat to the nation’s revenue streams and Nigeria LNG’s N727 billion dividends.

    Philip Mshelbila, managing director of Nigeria LNG, lamented the impact of the attacks, which have severely disrupted gas supply and crippled production.

    According to Mshelbila, the Nigeria LNG, which plays a critical role in Nigeria’s economy and global energy market, has been forced to operate at a fraction of its capacity.

    The company relies on a network of pipelines to transport natural gas from upstream suppliers to its Bonny Island facility.

    However, frequent attacks on these pipelines have led to a drastic reduction in gas supply, having left four of the company’s six trains idle.

    “In the current moment, I am only running two trains out of six. Three of our gas supply pipelines are down for repairs due to illegal connections by thieves. These are critical lines—GTS 1, GTS 2, and GTS 4—that supply the energy required for our operations,” Mshelbila said at a panel session during the Nigeria International Energy Summit on Wednesday in Abuja.

    Mshelbila expressed deep concern over the situation, stating that the vandalism not only undermines Nigeria’s reputation as a reliable LNG supplier but also results in significant revenue losses for the country.

    “Since the Russian war, I have been approached by dozens of European and other countries for LNG, but we have been unable to supply it because of this. You see what is happening with Qatar and the US. We can’t compete,” Mshelbila said.

    The Nigeria LNG, which accounts for about 7 per cent of global LNG supply, has been a major contributor to Nigeria’s economy, generating billions of dollars in revenue annually.

    Experts have warned that the persistent attacks on Nigeria LNG’s gas supply pipelines could jeopardise its projected dividends of N727 billion to the Nigerian government by 2025, a 113 per cent growth from N346 billion last year.

    Data showed the federal government has received about $21.56 billion of the $44 billion dividends disbursed by Nigeria LNG in the last 25 years.

    Nigeria LNG was incorporated as a limited liability company to harness Nigeria’s vast natural gas resources and produce Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs) for the domestic market and export.

    It is owned by four shareholders: Nigerian National Petroleum Company Limited (49 per cent), Shell (25.6 per cent), TotalEnergies (15 per cent) and Eni International (10.4 per cent).

    The reduction in production capacity is expected to have far-reaching consequences, including a decline in export earnings and potential job losses in the sector.

    Security challenges in the Niger Delta region, where most of Nigeria’s oil and gas infrastructure are located, have persisted for years.

    Despite efforts by the government and private sector to curb pipeline vandalism and oil theft, the problem remains rampant.

    Mshelbila called for urgent action to address the security issues, emphasising the need for collaboration between the government, communities, and industry stakeholders.

    “Energy security has to be seen as important as national security. However, gas security has deteriorated, and until we can safeguard these pipelines, we will continue to underperform,” he said.

  • Feature: Oil Companies Still Have Vital Role to Play in African Energy

    Feature: Oil Companies Still Have Vital Role to Play in African Energy

    …These companies are validating the African Energy Chamber’s (AEC’s) long-held assertion that the African continent represents the next frontier for energy exploration and production

    By NJ Ayuk

    Behind every discovery, final investment decision (FID), and first oil announcement in our continent are companies of all sizes, advancing our energy industry and bringing Africans closer to realizing the energy security and prosperity that their petroleum resources represent. 

    Collectively, these companies are validating the African Energy Chamber’s (AEC’s) long-held assertion that the African continent represents the next frontier for energy exploration and production. 

    Despite concerns over corporate divestment from the African oil and gas sector in recent years — moves made largely in an effort to conform to expanding global ESG expectations — international oil companies (IOCs) and African national oil companies (NOCs) continue to be the key driving forces behind Africa’ short-term supplies, hydrocarbon potential, medium-term production, and spending. 

    As detailed in the African Energy Chamber’s (AEC) newly released report, “The State of African Energy 2024 Outlook,” NOCs collectively hold the continent’s largest working interest share of African hydrocarbon potential and supplies due to their involvement in upstream operations while IOCs hold the second largest share from their legacy operations in both North and sub-Saharan Africa. 

    But we are also seeing increased activity by international NOCs (INOCs) and independent companies in Africa. These entities are also contributing to the overall success of Africa’s fossil fuel industry. 

    National Oil Companies in Leading Roles
    As our new outlook report explains, we expect African NOC flow rates to reach approximately 2.63 million barrels per day (bpd) of liquids and 13.55 billion cubic feet per day (Bcf/d) of gas in 2023. In 2024, while we expect NOCs’ total liquid product to drop to 2.57 bpd of liquids, we are forecasting a significant increase in their natural gas production: to 14.17 Bcf/d. 

    Of all the NOCs operating across Africa, the efforts of just four amount to the lion’s share of the total supply. Estimates predict that, together, Sonatrach of Algeria, Angola’s Sonangol, Libya’s National Oil Corporation, and the Nigerian National Petroleum Corporation (NNPC) will be responsible for 85% of liquids and 88% of natural gas produced by African NOCs between 2023 and 2024. 

    The prominence of oil and gas production in the nations that these NOCs represent is due in part to an open and cooperative approach to development and a commitment to progress shared between them. 

    In September 2023, having failed to meet its OPEC quota and contending with a decline in production, the NNPC announced a substantial reduction of its standard contract negotiation period from three years to just six months. Formalizing the new terms in an agreement signed with oil majors Shell, Chevron, Eni, ExxonMobil, and TotalEnergies, the NNPC hopes they will help expedite foreign investment in Nigeria’s hydrocarbon sector. With $13.5 billion secured at present, Nigeria aims to reach a production level of 2.1 million bpd by December of next year.

    Amidst the Angolan oil and gas industry’s return to a more prosperous position, which this year saw the nation outpace Nigeria, taking the top spot among Africa’s largest oil producers, Sonangol brokered a deal with the China National Chemical Engineering Company (CNCEC) outlining the development of a refinery in Lobito. With a projected production rate of 200,000 bpd and a slated completion date in 2026, the refinery should eventually reduce Angola’s reliance on imports for gasoline and diesel.

    In Algeria, Sonatrach has been working with Italian multinational energy company Eni on natural gas production and the export of liquefied natural gas (LNG) to Europe. Since signing a Memoranda of Intent in January of this year outlining future joint projects, including upstream decarbonization and energy transition initiatives, the two companies have made progress on these efforts, meeting in Algiers as recently as October 2023 to discuss fugitive gas emission detection and flaring-down options at Sonatrach’s natural gas fields. 

    Other recent developments include the Memorandum of Understanding established between Norway’s largest oil and gas producer, Equinor, and Libya’s NOC. The agreement includes plans to evaluate Libya’s maritime region in the Mediterranean for its oil and gas potential and extend oil and gas sector training to local personnel. 

    Oil Majors Advancing Exploration
    In March of this year, in partnership with Shell and QatarEnergy, Namibia’s national petroleum corporation, Namcor, publicized a third oil discovery in the Jonker 1-X well in the Orange Basin off Namibia’s southern shore, adding to the sizeable discoveries made by Shell and France’s TotalEnergies in the Graff-1X and Venus-1X wells in 2022. Namibia expects to see first oil from these finds by 2030. 

    At the Angola Oil and Gas 2023 conference and exhibition in September, Melissa Bond, Managing Director for ExxonMobil Angola reported 18 new discoveries in Block 15 and plans for further drilling in the Namib Basin next year.

    Numerous oil and natural gas discoveries in West Africa continue to show great promise as well. Considering just the BP-Kosmos Yakaar-Teranga discovery in Senegal, BP and Kosmos’ Orca discovery in Mauritania, and Eni’s Bailene discovery off the Ivory Coast amount to 3.6 billion barrels of oil equivalent, with additional sites in Ghana, Gabon, and Angola, this region is an exploration hot spot.

    As exploration is crucial to sustainability for Africa’s oil and gas industry, the AEC is pleased to report active exploratory drilling schedules over the next two years, with oil majors operating in Algeria, Egypt, Nigeria, and Namibia as the main drivers behind these efforts.

    Filling Voids and Capitalizing on Opportunities
    Where international corporate divestment from Africa’s oil industry is occurring, smaller players are taking up the slack. 

    Whether under public pressure to decrease emissions and focus on sustainable development goals or stakeholder pressure to sell off mature fields in pursuit of higher returns, as oil and gas majors pull away from portions of their operations, INOCs and wholly independent entities remain eager to take over where they left off. 

    By taking on ventures like the re-development of declining wells to boost production, these smaller companies are helping to satisfy the increasing global demand for fossil fuels while offering continued support to host communities facing the perils of abandonment otherwise, and their cumulative efforts add up to a significant percentage of Africa’s energy economy. 

    As documented in our 2024 outlook report, the 24-month period of 2023-2024 will see INOCs like Equinor, PetroChina, the China National Petroleum Corporation (CNPC), and several more responsible for three-quarters of all INOC liquids output in Africa. In the same time frame, we project that independents like the APA Corporation, Marathon Oil, Wintershall DEA, Perenco, Seplat Energy, Tullow, and ConocoPhillips will collectively produce the third-highest natural gas output. 

    As the AEC continues to advocate for a thriving African energy industry and encourage investment in our continent — just as we encourage every hydrocarbon-bearing African nation to engage in uncomplicated, mutually beneficial trade negotiations — our own optimism grows. 

    For the AEC, each outlook report we publish indicates that the African oil and gas industry is secure, strengthening with time, and well on its way to becoming an invaluable asset to the global energy market. 

    NJ Ayuk is the Executive Chairman of African Energy Chamber 

  • The African Energy Chamber (AEC) Urges African Union (AU) and the Africa Climate Summit to Prioritize Labeling Natural Gas and Nuclear as Green Energy/Renewable

    The African Energy Chamber (AEC) Urges African Union (AU) and the Africa Climate Summit to Prioritize Labeling Natural Gas and Nuclear as Green Energy/Renewable

    Representing the voice of the African energy sector, the African Energy Chamber (AEC) has long been a fierce advocate for the role oil and gas plays in Africa. While climate activists have dubbed these resources as ‘dirty’, oil and gas stand to significantly advance energy security across the continent, increasing access to electricity, fueling industrialization and opening up economic opportunities for millions continent-wide. The AEC calls on the African Union (AU) to align policies with demand, embracing gas and nuclear energy as green solutions, as the European Union (EU) has for its own continent.

    Last year, the EU made a decision, supported by the European parliament in July 2022, to label natural gas and nuclear energy as ‘green.’ The move essentially gave foreign investors and project developers the greenlight – excuse the pun – to fund and develop such projects. However, following the advent of the policy, it was clear that the EU’s recognition of gas as green was only directed at Europe, and that African gas resources were to remain ‘dirty.’ At a time when the international community continues to villainize African gas, the AEC calls on the AU to implement its own gas and nuclear-friendly policies.

    Currently, over 600 million people are without access to electricity in Africa while 900 million are without access to clean cooking solutions. At the same time, the continent has one of the youngest and fastest-growing populations. As demand for energy grows, Africa’s gas resources stand to fuel the economy. The continent’s proven gas resources are measured at 620 trillion cubic feet, most of which remain undeveloped. Lack of investment in the gas industry has largely restricted monetization, despite the potential of the resource to alleviate energy poverty. Domestic gas utilization is also still in its infancy stage, with the majority of Liquefied Natural Gas (LNG) exported to European markets. While the AU has put in place policies such as the African Continental Free Trade Agreement (AfCFTA), intra-African trade cannot be fully implemented if gas is not identified as a green energy source.

    To alleviate energy poverty and bolster industrialization, Africa requires substantial investments to be made in pipeline, power infrastructure, LNG terminals and applications. An AU-led ‘gas is green’ policy will galvanize financing for the continent’s gas projects while kickstarting the development of small- and large-scale LNG and power generation facilities. And the timing could not be more important. Sizeable oil and gas discoveries continue to be made across the continent. Namibia, for example, made five hydrocarbon finds in 2022 and 2023 while major projects have or are poised to come online in Senegal and Mauritania (Greater Tortue Ahmeyim); Mozambique (Coral Sul); Nigeria (Nigeria LNG); and many more countries. While the AfCFTA has essentially removed barriers to trade and market entry, unless supported by an AU-led ‘gas is green’ policy for Africa, the benefits of the continent’s resources as well as its trade structures will not be realized.

    This week, the AU’s Inter-Institutional Coordination Meeting for the Implementation and Domestication of the African Commodity Strategy will take place in Addis Ababa. The meeting, held under the theme, ‘Commodity-led Industrialization for One African Market,’ falls under the flagship project of the AU’s Agenda 2063, ‘The African Commodity Strategy,’ which aims to develop Africa’s commodities as a driver of structural, social and economic transformation. Central to these commodities should be gas, the products of which have the potential to drastically change the socioeconomic landscape in Africa. For a continent that produces less than 2% of global greenhouse gas emissions, it is unjust for the AU to sit by and allow this product to not be used while the same resource continues to drive development and improve the standard of living in Europe.

    “The AU should not villainize the very resources that offer the continent the chance to industrialize, electrify and grow, but rather, should provide the regulatory tools that enable the trade of gas-based products on a continental basis. Africa has abundant natural gas resources: a sustainable energy solution lying in arms reach of many countries continent-wide. Developing these resources is no longer simply an exciting or challenging investment opportunity, but rather, investing in gas and nuclear has become one of the only ways Africa will industrialize and make energy poverty history,” states Ayuk.

    Gas and nuclear energy can undeniably act as a pivotal lifeline for numerous African nations. By mirroring the policies of the EU, the AU could set the stage for a substantial influx of foreign investment, which, in turn, could serve as a catalyst for propelling commodity-driven and gas-centric industrialization efforts across the African continent. Africans deserve to have the same advantage as European have. By implementing a ‘gas is green’ policy for Africa, the AU stands to usher in a new era of investment and development in Africa, while spearheading a just and inclusive energy transition.

  • “Crude Oil, Petroleum Products will Continue to be Important in Africa”- Wale Ajibade

    “Crude Oil, Petroleum Products will Continue to be Important in Africa”- Wale Ajibade

    With dual challenges of meeting rising demand while transitioning to a cleaner energy future, Africa’s downstream sector has been in the spotlight, and during the 2023 edition of the African Refiners & Distributors Association (ARDA) Conference – where the African Energy Chamber (AEC) is participating – this very challenge is being explored.

    During ARDA Week 2023, Wale Ajibade, Executive Director of Sahara Group, delivered a presentation on ‘Meeting Africa’s Growing Energy Requirements in the Evolving Global Landscape,’ with insight given into the continent’s downstream opportunities, future energies and the role Sahara continues to play in expanding the market.

    Kicking off his presentation, Ajibade emphasized that projected growth trends in Africa indicate an increase in energy demand over the next few decades, with demand expected to be driven by industrialization and urbanization and is expected to coincide with the global energy transition. Additionally, the rise in demand is projected to accelerate Africa’s deployment of downstream infrastructure to enable the continent’s energy independent and sustainability while serving to address energy poverty.

    According to Ajibade, Africa faces five challenges across the downstream sector. Specifically, the over-reliance on product importation, supply chain issues, oil theft and vandalism, fuel subsidy, and the energy transition. However, there are clear solutions to these challenges, which include, “investing in the construction of new refineries and the modernization and expansion of existing infrastructure; the creation of enabling environments for investment in infrastructure; leveraging technology to address pipeline theft and vandalism – such as drones and the internet of things –; regulating fuel subsidies; and pushing for gas to be used more predominantly including liquefied natural gas (LNG), liquefied petroleum gas (LPG) and compressed natural gas for power, energy and transportation while adapting existing refineries to the changing landscape.”

    In addition to oil, Ajibade provided insight into the viable solutions for the future of Africa’s energy sector. Drawing attention to natural gas while identifying the role solar, wind and hydro will also play, Ajibade stated that with roughly 13% of global natural gas reserves based in Africa, the continent is expected to embrace gas in the coming years.

    According to Ajibade, while fossil fuels will continue to remain the major source of Africa’s energy demand, particularly through oil, it is expected that there will be a major shift towards a cleaner and more sustainable energy mix through the use of gas. In this scenario, natural gas will begin to play the role of bridging between more polluting fossil fuels and zero-carbon technologies, such as wind and solar. With factors such as a growing population, increased urbanization and economic expansion, as well as growth across the industry, commerce, manufacturing and agricultural sectors, Africa is projected to rely more and more on gas. However, challenges associated with a lack of investment, limited infrastructure, foreign exchange issues and limited knowledge on gas technologies continue to hinder resource maximization in some gas-rich countries such as Nigeria – which has put in place its Decade of Gas initiative to monetize resources.

    As the transition to cleaner sources of energy become increasingly important, Ajibade shared insight into Sahara Group’s operations and agenda, stating that as part of the company’s broader Environmental, Sustainability and Governance initiatives, Sahara continues to make investments along the entire gas value chain. On the upstream, the company invests in a gas-heavy portfolio and has begun the process of eliminating gas flaring across all its upstream assets. On the midstream front, the company has stakes in several LNG and gas ventures including four LPG vessels focusing on increasing LPG supply into West Africa. Meanwhile, on the downstream and consumption side, gas demand to the company’s power plants is expected to increase significantly by 2026.

    Additionally, Ajibade made note that over the past two decades, global investment in renewable energy has grown rapidly. However, Africa receives less than 3% of this investment. As such, Ajibade stated that to attract more investment and create enabling environments, a series of financial options can be implemented, including blended finance, green bonds, risk mitigation instruments, innovation and carbon markets. According to Ajibade, the creation of carbon markets in Africa could help countries develop mitigation projects while receiving climate-related investment, and with 24 countries already conveying an interest in this area, opportunities for trading carbon credit across several exchanges is in sight.

    Natural gas, downstream investment and carbon markets all represent key themes at the 2023 edition of the continent’s premier event for the oil and gas industry: African Energy Week (AEW). Taking place in Cape Town from October 16-20, this year’s edition of AEW is centered on deals, networking and collaboration, with a series of high-level panel discussions and presentations – similar to that of Ajibade’s – as well as investor summits and networking functions driving new engagement among financiers and project developers. Representing the AEC’s annual energy conference, AEW 2023 represents a not-to-be-missed event.

  • Feature- Nigeria and African Energy Poverty and Gas-To-Power Projects: Build More and Build Better

    Feature- Nigeria and African Energy Poverty and Gas-To-Power Projects: Build More and Build Better

    By NJ Ayuk

    As the executive chairman of the African Energy Chamber (AEC), it’s my honor and my privilege to tell the world the story of Africa’s oil and gas industry – to explain what this continent can do to help power the world and fuel its own future. But it’s also my mission to talk about African energy poverty and to explain why this continent needs better access to energy now in order to illuminate its own potential and power forward.

    To illustrate the issue of energy poverty in general, I’d like to focus on energy poverty in Nigeria in particular.

    Within Africa, Nigeria is an interesting subject. It’s the most heavily populated country in Africa, with more than 200 million citizens. It surpassed South Africa to become the continent’s largest economy about a decade ago, and its GDP topped USD441.5 billion in 2021. It has the largest crude oil reserves in sub-Saharan Africa and is typically the largest liquids producer in the region, though output figures have slumped this year due to problems with theft and sabotage. Likewise, it has sub-Saharan Africa’s biggest reserves of natural and associated gas and is far and away the region’s biggest gas producer.

    Nigeria also experiences significant energy poverty, despite these advantages. As noted in the AEC’s recently released report, “The State of African Energy: 2023 Outlook,” consistent access to modern energy services – that is, steady and reliable electricity supplies – is available to only 60% of the country’s population on average, and access rates appear to be significantly lower in rural areas than they are in urban areas. And according to World Bank data, about 99.9 million people, or more than 47% of Nigeria’s population, lived in rural areas as of the end of 2021. That means nearly 100 million Nigerians are living without any true level of certainty that the lights and the electric power that so many in the developed world take for granted will stay on.

    I, for one, think they deserve to have that certainty.

    They deserve it on human grounds, and their country already has a significant amount of what is needed to provide them with it. And by that, I mean that Nigeria has gas that it could use to generate power.

    What Nigeria Has

    As I’ve already noted, the country’s gas resources are the largest in sub-Saharan Africa. Nigeria has already been shown to have more than 200 trillion cubic feet (tcf) of gas in proven reserves, and government officials believe that the figure could go even higher, perhaps reaching 600 trillion cubic feet (tcf) following additional exploration.

    If that prediction comes true, Nigeria will have the fourth largest gas reserves in the world, behind only Russia, Iran, and Qatar. It will have more than enough gas to meet current demand; it will have enough gas to produce significant volumes of LNG for export while also supporting gasification programs, both on the domestic and regional levels.

    But it’s not enough just to have all that gas. Nigeria also needs the means to make use of its gas. Without the proper infrastructure, it won’t be able to put its resources to work and will merely have a scattered collection of raw materials.

    What Nigeria Needs

    In practical terms, this means that Nigeria ought to have the following:

    • Upstream production facilities for gas.
    • Midstream gas transportation facilities such as pipelines, including field networks and trunk lines.
    • Downstream gas-processing plants and production facilities for gas-derived fuels such as liquefied natural gas (LNG), compressed natural gas (CNG), and liquid petroleum gas (LPG).
    • Downstream gas distribution systems, including town gas networks.
    • Downstream gas storage depots.
    • Gas-fired thermal power plants (TPPs) – preferably co-generation plants, as they are more efficient.
    • Transmission, distribution, and storage infrastructure for the electricity produced by gas-fired TPPs.
    • Smart and secure operational technology (OT) systems that can optimize the flow of data and resources between consumer markets and energy networks

    I’m not suggesting here that it’s the Nigerian government’s job to provide all this infrastructure. But I do believe that it’s Abuja’s responsibility to make sure that this infrastructure becomes available. To this end, I think that Nigeria also needs government bureaucracies that are competent and trustworthy enough to ensure that oil-, gas-, and power-related contracts are only awarded to companies capable of providing the goods and services required within the acceptable parameters.

    What Nigeria Envisions

    Developing this infrastructure requires the right kind of vision, which Nigeria already has in place: its “Decade of Gas” program is designed to make the country entirely gas-powered by 2030.

    When President Muhammadu Buhari rolled out this initiative in March 2021, he indicated that it aimed to make the gas sector the cornerstone of Nigerian economic activity. By the time the “Decade of Gas” comes to an end, he said, the country will have done the following:

    • Adopted a new oil and gas law to facilitate investment.
    • Carried out new exploration projects, discovered new reserves, and brought new fields onstream.
    • Constructed new gas-processing plants and production facilities for LPG and other gas-derived fuels.
    • Built new export pipelines and constructed new production trains at gas liquefaction plants such as Nigeria LNG (NLNG).
    • Constructed new domestic pipelines along routes to serve local customers plus gas-fired thermal power plants (TPPs) to increase domestic electricity supplies.
    • Expanded domestic power transmission and distribution networks, especially in rural areas.

    Nigeria still has a significant amount of ground to cover before it achieves all of these targets. However, it has made progress. The biggest example of this is the Petroleum Industry Act (PIA), which Buhari signed into law after it passed both houses of the National Assembly. The Nigerian government is also successfully promoting LPG, a gas-derived fuel, as a replacement for wood and charcoal as cooking fuel. (According to NLNG, domestic LPG consumption has climbed by around 1,000% over the last 14 years.)

    And as recently as this November,  Nigeria moved closer to building its first floating liquified natural gas (FLNG) facility. Nigerian company UTM Offshore signed a front-end engineering design (FEED) contract to design the facility with JGC Corporation, Technip Energies, and KBR. Chief Timipre Sylva, Minister of Petroleum Resources, Nigeria, described the project as a step in the right direction for Nigeria to develop, exploit, and monetize its natural gas.

    During the African Energy Week in Cape Town, Amni International Petroleum Development Company Limited, a Nigerian independent oil and gas exploration and production company and the African Export–Import Bank (Afreximbank) signed an agreement for the provision of a $600 million syndicated reserve-based lending facility.

    To a lesser extent, Abuja can also claim credit for the headway it has made on the Ajaokuta-Kaduna-Kano (AKK) pipeline, which is being built to bring gas to the northern part of the country. When finished, the pipeline will deliver fuel to gas-powered industrial facilities and feedstock to TPPs with a generating capacity of 3,600 MW. It may also serve eventually as the first leg of the Trans-Saharan Gas Pipeline (TSGP) network, which will allow Nigeria to export gas to Europe via Algeria. Unfortunately, though, the project has been running behind schedule, and the heavy floods that began hitting many parts of the country in mid-2022 have caused additional delays.

    In the meantime, Abuja has also moved forward with plans for establishing another gas export network – the Nigeria-Morocco Gas Pipeline (NMGP), a 5,600-km offshore network that would serve more than a dozen West African states. This system would, like TSGP, pump Nigerian gas to Europe, but it would also serve the purpose of delivering the gas to regional markets as well. As such, it would establish Nigeria as a supplier of fuel to much of West Africa.

    Thus far, neither NMGP nor TSGP has been built. But Nigerian authorities are working to hammer out agreements on these projects – and they see the ways that European market conditions have changed since the beginning of 2022 as an incentive to work harder and to work faster.

    What Nigeria Could Achieve

    If they succeed, they will create infrastructure that could do quite a bit to alleviate energy poverty in Nigeria and beyond.

    In the case of NMGP, the construction of this pipeline would provide multiple countries beyond Nigeria with a steady source of gas. As such, it would serve as an incentive for the construction of TPPs in places where millions of people do not have access to reliable energy supplies. At the same time, the pipeline’s access to European markets, where buyers are more likely to pay in hard currency, would help ensure the profitability of the whole system.

    Likewise, the TSGP network has the potential to benefit Nigeria by ensuring that the country has enough access to hard-currency markets in Europe to cover the costs of the domestic initiatives that depend on AKK – that is, the gas-fired power and industrial projects in the northern part of the country.

    Infrastructure Is Needed Throughout the Continent

    Of course, energy poverty is not limited to Nigeria; more than 600 million people in Africa lack access to electricity, and nearly 730 million use hazardous and inefficient cooking fuels and technologies. Nevertheless, while each African country is unique, I hope that this look at Nigeria helps shed light on some of the common challenges facing our continent’s countries — a higher rate of energy poverty in rural areas and the tremendous need for infrastructure development.

    As “The State of African Energy: 2023 Outlook” points out, even in the four African countries with a universal electricity rate of more than 70% — Egypt, South Africa, Kenya, and Algeria — access to electricity drops significantly in rural areas, to an average of about 63% of the population, compared to an average of 96% in urban areas.

    The situation for rural Africans is even more dismal in other parts of the continent. In the Democratic Republic of Congo, for example, only about 19% of the overall population has access to electricity and in rural areas, only 1% of the population has electricity.

    This will not change until we develop the necessary infrastructure to deliver energy to Africans throughout the continent.

    On the brighter side, Nigeria also gives us examples of measures African countries can take to begin addressing these challenges. No, Nigeria has not achieved its ultimate goal-eradicating energy poverty, but it has plans and initiatives in place with real potential to make a difference — as long as Nigeria continues pursuing them.

    If they haven’t done it yet, governments throughout the continent should be developing and implementing multipronged programs of their own to eradicate energy poverty. They, like Nigeria, should be leveraging their natural gas resources. They should be developing and executing gas utilization plans, improving their approach to resource management, monetizing natural gas to help pay for infrastructure projects, and launching more gas-to-power initiatives.

    Instead of being daunted by the vast numbers of Africans without electricity, shrugging our shoulders, and giving up, I hope that we will be steadfast in our determination to make energy poverty history by the end of this decade.

    For a complete look at our recommendations and “The State of African Energy: 2023 Outlook,” download our report here (https://bit.ly/3goAZzK).