Nigeria’s Vast Gas Reserves: A Solution To The Country's Energy Crisis

By Oluwabukola Jimoh ــ Last Update 15 October 2024

Nigeria’s substantial gas reserves could provide immediate solutions to the nation's ongoing energy challenges if harnessed effectively, according to Abiola Lukman Lawal, the Managing Director and CEO of Eterna Plc. Speaking at the 2024 NAEC Annual Strategic International Conference in Lagos, Lawal emphasized the critical role of Compressed Natural Gas (CNG) for transportation and Liquefied Petroleum Gas (LPG) for cooking, positioning them as viable and cost-effective alternatives to traditional fuels.

During the panel session titled “Driving Energy Sufficiency in the Downstream Sector Through CNG and LPG,” Lawal outlined the benefits of adopting these gas solutions in the downstream sector. He noted that CNG and LPG can contribute significantly to reducing greenhouse gas emissions, offering cleaner combustion, and generating cost savings for both consumers and businesses. Furthermore, the expansion of the CNG and LPG supply chains would create new job opportunities, stimulating the economy.

Supporting the Energy Transition: Government Initiatives

Lawal highlighted several federal government initiatives designed to enhance the accessibility and circulation of natural gas across Nigeria. These include the Decade of Gas Initiative, the Presidential CNG Initiative (PCNGi), and the installation of new CNG stations aimed at improving gas infrastructure and promoting energy efficiency.

“In 2024 alone, 12 new CNG stations were commissioned in Lagos and Abuja, with plans to add 35 more across various geopolitical zones,” Lawal said. These developments align with the Presidential CNG Initiative launched in 2023, which was designed to alleviate the impact of rising fuel prices, especially in transportation. The initiative also offers free or heavily discounted vehicle conversions through its Conversion Incentive Programme, encouraging the use of CNG-powered buses and cars.

Investing in Infrastructure and Policy Reforms

To fully unlock the potential of CNG and LPG in Nigeria, Lawal called for large-scale investment in gas infrastructure, estimating that $20 billion per year is needed to develop the sector. He revealed that the Presidential CNG Initiative aims to raise over $350 million by 2027 for CNG infrastructure, with an additional $750 million required to improve LPG transport and retailing facilities.

Lawal also stressed the importance of policy and regulatory reforms to encourage private sector investment in the gas sector. He suggested that tax credits and rebates for purchasing CNG vehicles or converting existing ones, as well as grants and low-interest loans for CNG and LPG infrastructure, would stimulate growth. Consumer sensitization efforts through media campaigns, workshops, and community programs were also key to creating awareness about CNG and LPG as viable alternatives to oil.

A Collaborative Approach to Energy Sufficiency

The conference, themed “Gas as Energy Transition Fuel: Navigating Nigeria’s Trilemma of Finance, Energy Security, and International Politics,” attracted key stakeholders from various industries. Adelanke Dayo-Adepoju, a gas and renewable specialist with the Major Energies Marketers Association of Nigeria (MEMAN), reiterated the importance of natural gas in achieving a more sustainable energy landscape. MEMAN has been advocating for cleaner energy solutions, including natural gas, solar power, and biofuels like ethanol, in collaboration with key partners.

Dayo-Adepoju also welcomed the Nigerian government’s introduction of the VAT Modification Order 2024, which exempts vital energy products like diesel, LPG, CNG, and electric vehicles from VAT. This new fiscal incentive aligns with MEMAN’s advocacy for sustainable energy and supports the ongoing efforts to promote the adoption of renewable energy practices in Nigeria.

The Path Forward

With Nigeria’s abundant gas reserves, the country is well-positioned to transition toward more sustainable and affordable energy solutions. The collaborative efforts of the government, private sector, and stakeholders in promoting CNG and LPG adoption could pave the way for improved energy sufficiency and a cleaner environment. To drive this transition, large-scale investments in infrastructure and supportive policy reforms will be critical in ensuring that natural gas becomes a central pillar of Nigeria’s energy strategy.

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Oluwabukola Jimoh

Oluwabukola Jimoh is a dynamic academic writer and captivating energy blogger. She is able to delve into intricate subjects with an insatiable thirst for knowledge, crafting thought-provoking essays that engage and enlighten her readers.