15/02/2022
Nigeria is one of the largest and oldest oil producers in Africa. The oil and gas sector is one of the most important sectors in the country’s economy, accounting for more than 90% of the country’s exports and 80% of the federal government’s revenue.
The country is the ninth-largest in terms of global gas reserves with over 193.3 Tcf, but it has not started up any new gas projects recently.
As of 2020, Nigeria had the largest oil and gas reserves in the African region, with around 37 million barrels of crude oil (36,910) and 5.5 trillion cubic meters of gas.
The country plans to become an export hub in Africa, by exporting not only to regional countries but also to other Asian countries like India and China, where the gas demand is anticipated to increase in the coming years.
Further, the country has significant domestic demand for gas mainly from the power sector. The gas-fired power plants in the country are consistently under-utilized due to lack of uninterrupted gas supply. The country also has a potential domestic demand from the commercial, residential, and industrial sectors. By building the country-wide gas distribution network, the Nigerian government aims to tap into this potential.
Moreover, the country is investing heavily in LNG facilities, gas processing facilities, and gas pipeline projects. The expansion at the Bonny LNG plant by introducing train 7, alone, is expected to add 35% more LNG capacity to the country. With this, the Nigeria Liquefied Natural Gas (NLNG) Limited plans to invest USD 7 billion on the Train-7 project which would expand its production capacity to 30 mtpa making Nigeria the 3rd largest exporter of gas in the world after Qatar and Australia.
Therefore, owing to the above points, the growing investments in natural gas infrastructure is expected to drive the country's oil and gas market during the forecast period.
