Nigeria’s Gas Production: A Rollercoaster Ride Over the Years
The gas production industry in Nigeria has experienced both highs and lows over the years. From a steady growth in production output between 2012 and 2020, the sector witnessed a sudden decline in 2021, which continued into 2022. This decline can be attributed to a decrease in liquefied natural gas (LNG) exports, ultimately affecting Nigeria’s global share in LNG exports.
According to data from the Energy Institute, Nigeria’s gas production output dropped by approximately 11% in 2021, reaching 45 billion cubic meters (bcm). This downward trend continued into 2022, as the volume dropped further to around 40.4 bcm. The main factor behind this decline was the low export volume of LNG, which decreased by 16% to 19.6 bcm in 2022.
As a result of the drop in gas production output, Nigeria’s global share in LNG exports dwindled to just 4%. This is a concerning development for a country that has historically been a major player in the global LNG market.
To address the challenges in the gas production sector, the Nigerian government introduced the ₦250 billion NGEP fund, administered through the Central Bank of Nigeria (CBN). The fund aimed to support the construction of Compressed Natural Gas conversion centers and foster the growth of the industry. However, there have been concerns regarding the disbursement of the ₦130.8 billion allocated for this purpose.
The Senate Committee on Gas, led by Senator Jarigbe Agom Jarigbe, has initiated an investigative hearing into the disbursement of the NGEP intervention fund. The fund was disbursed to 15 companies involved in the construction of Compressed Natural Gas conversion centers. Some of the key players in this initiative include Nipco Gas Ltd, Nipco Plc, Hyde Energy Ltd, Lee Engineering and Construction Company, Pinnacle Oil and Gas Fze, and Transit Gas Limited, among others.
The purpose of the investigative hearing is to ensure transparency and accountability in the disbursement process, as well as evaluate the impact of the fund on gas production and the overall industry. This initiative signals the government’s commitment to addressing challenges in the gas production sector and ensuring sustainable growth in the future.
In conclusion, Nigeria’s gas production industry has experienced a rollercoaster ride in recent years. While there was a steady growth in production output, the sector witnessed a decline in 2021 and 2022, primarily due to a decrease in LNG exports. The government’s NGEP fund was introduced to support the industry, but concerns have been raised regarding its disbursement. The ongoing investigative hearing aims to address these concerns and ensure a brighter future for Nigeria’s gas production sector.