…Says only 30% serves local market
By Adewale Sanyaolu
The federal government has flagged the deepening gap between Nigeria’s gas production and its local utilisation and said it should be narrowed to avoid stalling industrial growth and derailing the country’s energy transition goals.
The Special Adviser on Energy to the President, Mrs. Olu Arowolo Verheijen, stated this at a recent stakeholders meeting organised by the Association of Local Gas Distributors (ALGD) in Abuja.
The Special Adviser further lamented that only 30 per cent of Nigeria’s produced gas serves the local market and emphasised that increasing domestic gas consumption is central to unlocking industrial capacity, expanding power access and reducing Nigeria’s dependence on imported energy sources.
Earlier in his remarks, Chairman of ALDG and Managing Director of Axxela Gas Distribution, Mr. Kehinde Alabi, emphasised the urgent need to unlock Nigeria’s gas potential through infrastructure development, regulatory clarity and market-driven pricing.
“The question is no longer if gas matters, but how we unlock its full potential”, he said.
The ALDG Executive Secretary, Mr. Oga Adejo-Ogiri, underscored the forum’s central message of collaboration across government, industry and society.
The inaugural event established a strong foundation for ongoing dialogue and action to strengthen Nigeria’s domestic gas distribution network, positioning natural gas as a driver of economic growth and energy transition.
Stakeholders at the meeting called for a deeper collaboration to unlock Nigeria’s gas capabilities.
They reiterated the need for the industry to prioritise partnerships to collectively focus on enhancing infrastructure, improving the regulatory environment, and promoting commercially viable developments.
Other key industry associations, including the Nigerian Gas Association, the Nigerian Liquefied and Compressed Gases Association, and the Virtual Gas Infrastructure Association of Nigeria, have joined voices in advocating for stronger collaboration across the gas value chain to unlock scale and drive sustainability.
Their collective position aligns with the findings of a recent industry report, which highlighted significant disparities in gas production and utilisation. According to the report, Nigeria produced a total of 6.9 billion standard cubic feet per day (bscf/d) of gas in 2024, comprising 3.96 bscf/d (57 per cent) of Associated Gas (AG) and 2.92 bscf/d (43 per cent) of Non-Associated Gas (NAG). Of this volume, 36 per cent was directed toward export sales, while domestic consumption lagged at just 27 per cent.
Field operations accounted for 30 per cent of the gas use, while 7 per cent of the total output was flared.
“Most of the total gas production is from associated gas, that is, gas produced in association with oil,” the report explained.
“Any impediments to oil production, such as evacuation constraints due to vandalism or other operational challenges, impacted gas production during this period.”
The report further noted that the export market continues to dominate, leaving the domestic supply constrained. “The domestic market continues to be challenged by dearth of infrastructure in both the offtake and supply value chain,” it stated.
“Issues relating to back pressure (upstream) and low pressure (midstream and distribution) challenges continue to limit supply potential through this critical pipeline. In a similar vein, the non-completion of the OB3 pipeline will potentially threaten the availability of about 300 million standard cubic feet per day (MMSCFD) from the ANOH gas plant intended for supply to the domestic market early 2025.”
The report also identified constraints on the demand side, including the inability of some offtakers to absorb gas due to limitations in downstream distribution systems.
To address these challenges, the commission stated that it is working with key stakeholders to enhance the Domestic Gas Delivery Obligation (DGDO) administrative framework, with the goal of deepening gas utilisation across the country.
“On the other hand, gas flaring numbers have been limited to seven per cent,” the report noted. “Through the administration of the gas flaring thresholds for all gas-producing fields and facilities, the commission aims at achieving the 2030 zero routine flaring target for the country through a progressive incremental tightening of the threshold values.”