Nigeria has fewer than 50 Compressed Natural Gas (CNG) stations to serve its population of 200 million people, according to Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). This shortage persists despite efforts by the Federal Government to promote CNG as an alternative to costly fossil fuels such as petrol and diesel, through the Presidential Compressed Natural Gas Initiative.
Ahmed made this disclosure during his speech at the Nigeria Association of Energy Correspondents’ conference in Lagos. He expressed concern over Nigeria’s substantial gas utilisation deficit, highlighting that the country continues to flare around 2.5 billion cubic feet of gas daily enough to power the nation’s electricity needs.
“The Decade of Gas initiative seeks to end this waste, ensuring that by 2030, gas contributes significantly to our energy mix, adding up to 5,000 MW to the national grid and reducing our reliance on imported fuels,” Ahmed stated.
Ahmed emphasised the importance of diversifying Nigeria’s energy sources to reduce dependency on any single fuel. He pointed out that the number of Liquefied Petroleum Gas (LPG) plants nationwide is less than 3,000, while CNG compression stations are under 50, a concerning figure for a country of Nigeria’s size.
To secure the country’s energy future, Ahmed stressed the need to develop a robust gas sector, which would not only address domestic energy needs but also position Nigeria as a reliable energy supplier to neighbouring countries, enhancing regional energy security and fostering economic collaboration.
He further explained that the Presidential CNG initiative is a key government policy aimed at strengthening energy security and reducing the nation’s dependence on oil. However, Ahmed warned that Nigeria stands at a crossroads, facing the challenge of transitioning to a new energy future while grappling with economic and social issues.
Ahmed recalled Nigeria’s Energy Transition Plan, which was launched in 2022 and designated gas as a transition fuel to steer the country away from carbon-heavy energy sources towards less carbon-intensive options like LPG and CNG. However, he pointed out that energy security and international politics remain significant obstacles.
“Nigeria is blessed with over 209 trillion cubic feet of proven associated and non-associated gas reserves, the largest in Africa and among the top ten globally,” he said. “Despite this immense potential, gas has often taken a back seat to crude oil.”
Ahmed noted that natural gas, which emits about 50% less CO2 than coal and 30% less than oil, is an ideal bridge to a low-carbon future while also meeting Nigeria’s immediate energy needs. He added that switching to gas would also help the country manage the intermittency challenges posed by renewable energy sources like wind and solar.
Despite the potential of gas, Ahmed acknowledged that the financial investment required for Nigeria’s gas infrastructure is substantial, running into billions of dollars. However, he believes the enactment of the Petroleum Industry Act (PIA) in 2021 has provided a solid foundation for attracting investments, offering better fiscal terms and regulatory clarity. The establishment of the Nigerian Midstream and Downstream Gas Infrastructure Fund is another step towards supporting the sector’s growth by improving access to finance and encouraging local and international partnerships.
On the global front, Ahmed expressed concern over the increasing pressure to decarbonise energy sources and move away from fossil fuels. He warned that as an import-dependent nation with oil as its major source of foreign exchange, Nigeria would be caught in a difficult situation if calls to phase out fossil fuels materialise in the near term.
“While we acknowledge the global shift towards cleaner energy, Nigeria must tread carefully, ensuring that our energy transition does not compromise our economic stability,” he concluded.