The Executive Director, Economic Regulations and Strategic Planning, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Prof. Zainab Gobir, has called for faster development of gas infrastructure and reforms in the power sector to accelerate the maturity of Nigeria’s gas market.
Gobir made the call on Thursday at the Gas Market Maturity Workshop held at the Petroleum Technology Development Fund in Abuja.
She said Nigeria still had a long journey to cover before achieving a truly mature gas market, stressing that the process could not be driven by the gas sector alone. Gobir said the country must first address its infrastructure gaps and improve the utilisation of its available gas resources.
“This is what exactly is now coming back to this particular topic of the gas maturity. Any guess? This all kind of varieties of survey has already, in fact, is the testimony of the fact that a long journey and path has to be traversed before we call ourselves gas matured market,” she said.
“As we speak, month of August we flared around 18 and a half billion cubic feet of gas,” she said, describing the volume as a significant waste of a valuable resource.
Gobir urged stakeholders to focus on eliminating gas flaring and developing the infrastructure required to move gas from production sites to consumers. She stressed that gas infrastructure, including pipelines, processing facilities and distribution networks, must be developed rapidly.
She said infrastructure development was therefore critical to achieving the level of market maturity required for willing buyers and sellers to transact effectively.
Gobir also identified the power sector as a major factor in the development of Nigeria’s gas market, noting that electricity had a multiplier effect across the economy.
“Power sector for any country is so important because it has got a cascading economic impact on the entire economic value chain,” she said.
She noted that Nigeria had more than 16,000 megawatts of power generation capacity but was producing only about 4,000 to 5,000 megawatts.
“A country of the size 230 million people, four to five megawatt power generation is in fact pathetic,” Gobir said.
She called for stronger coordination between the gas and power sectors, stressing that gas market development could not be achieved by the gas industry in isolation.
Gobir also urged Nigeria to prioritise domestic utilisation of its gas resources, particularly for power generation and industrial development, before focusing extensively on exports.
“Gas maturity cannot only be done by the gas department or gas ministry. It has to be intertwined with all other functionality of the government,” she said.
“First, in fact, you have enough your own demand. Increase your power consumption. Increase your gas consumption. Increase your economy, then you should export whatever exporting is exporting,” she added.
Gobir said greater domestic gas utilisation would support job creation and economic development, while reducing the country’s dependence on imported finished products.
She further highlighted the importance of the transport sector, saying wider deployment of compressed natural gas could help reduce transportation costs and its impact on consumer prices.
She also advocated the development of an efficient gas distribution system that would support the conversion of trucks, buses and other vehicles to CNG.
The NMDPRA director welcomed the regulator’s plan to advance gas distribution licensing. She said wider gas distribution infrastructure could make access to gas safer and more convenient for households and businesses.
Gobir also shared her experience as a major industrial gas consumer, saying her organisation had encountered difficulties obtaining contracted gas volumes despite having payment security arrangements in place.
According to her, gas was at times diverted to other locations, forcing the company to seek reconciliation and regulatory intervention. She said the intervention of the NMDPRA helped improve the situation, adding that gas supply had since improved but was still below the level required.
Gobir stressed the importance of ensuring that contractual commitments were matched by adequate physical infrastructure and gas availability. She also urged gas consumers and other private-sector stakeholders to consider investing in infrastructure where necessary to support supply.
She cited the construction of a 55-kilometre gas pipeline by her organisation as an example of private-sector participation in infrastructure development. She also said the development of the gas market required cooperation among regulators, government agencies, infrastructure operators and private-sector participants.
“It’s not only the gas sector. Every other cross-functional ministry agency has to work together in order to make this a great success,” she said.
Gobir also called for greater efforts to reduce gas flaring, noting that Nigeria had significant gas resources that could be deployed to drive industrial and economic development.
She said faster infrastructure development, improved power generation and stronger inter-agency coordination would be essential to unlocking the full value of Nigeria’s gas resources and deepening the country’s gas market.
Meanwhile, participants at the workshop rated the maturity of Nigeria’s gas market at an average of 2.2 out of 5, indicating that significant gaps remain before the market can be considered mature.
The assessment formed part of an interactive session at the workshop, where participants were asked to evaluate the current state of Nigeria’s gas market.
The workshop also featured breakout sessions where conversations on the immediate, midterm and longterm steps towards implementation of the Decade of Gas was the major focus.
