The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced its plan to attract a remarkable $22 billion investment to upgrade the country’s pipeline infrastructure, crucial for transitioning Nigeria towards a gas- powered economy.
This revelation forms a key aspect of the newly introduced NNPC Gas Master Plan (GMP) 2026, which aims to align Nigeria's abundant subsurface reserves with the domestic energy requirements.
As per the NNPC, despite having the largest proven gas reserves in Africa—estimated at 210 trillion cubic feet—Nigeria ranks only 16th worldwide in gas production. The GMP 2026 aims to address this disparity by enhancing midstream connectivity, expanding infrastructure, and ensuring commercial viability.
The current gas transportation network, extending over 2,500 kilometers, is a solid base but inadequate to fulfill the increasing industrial and power sector demands. Thus, NNPC is advocating for the completion of crucial national and regional projects, including the Ajaokuta-Kaduna-Kano (AKK) and the OB3 pipelines.
To bolster the growth of gas supplies, particularly for non-associated gas and deepwater developments, intensified investments are deemed essential for the long-term sustainability of the energy sector.
“The Domestic Gas Delivery Obligations (DGDO) have improved from 50% five years ago to 70% in 2024. Looking ahead, gas demand is anticipated to surpass supply by 2030, highlighting the urgent need to incentivize gas development and prioritize high-impact economic demand,” the NNPC disclosed.
Initiatives aiming to stimulate domestic consumption are projected to be led by the power sector, gas-based industries (GBIs), and commercial markets. Meanwhile, LNG is expected to drive export demand, composing approximately 70% of all export needs (with NLNG historically contributing over 95% of these volumes).
Nigeria possesses over 2,500 kilometers of existing pipelines, with plans to further expand through initiatives like the Ajaokuta-Kaduna-Kano (AKK) and OB3 projects, improving gas distribution nationwide. The ongoing development of gas pipeline infrastructure is estimated to require an investment of up to $22 billion.
Among the ambitious targets set forth in the GMP, there is a strong emphasis on gas monetization, noting that only about 60% of Nigeria's total gas production is being commercialized, translating to roughly 4.6 billion cubic feet per day out of an overall output of 7.5 billion cubic feet per day. The remaining amounts are either reinjected for oil recovery or lost due to routine flaring, with Nigeria currently ranking as the 7th largest gas-flaring country globally.
To turn this situation around, NNPC is striving for a substantial increase in gas commercialization, targeting 75% by 2027 and 80% by 2030.
“By 2030, we expect monetization to reach about 80% of the gas produced, supported by robust infrastructure, steady investments, and commitment to upstream development, as well as a reduction in reinjection and flaring activities. This ambitious agenda necessitates regular investment in the reliability of Central Processing Facilities (CPF), pipeline refurbishments, and central hub interconnections,” the gas master plan elaborated.
To meet these ambitious targets, NNPC has pledged to eradicate routine gas flaring by 2027, a change that promises not only environmental benefits but also significant economic returns by redirecting gas towards power production and gas-based industries such as fertilizer and petrochemical plants.
Identified as pivotal for future growth, seven high-readiness hubs are projected to account for 60% of Nigeria's declared proved plus probable gas reserves.
One standout facility among these hubs is the Gbaran-Soku-Obagi-OBOB Hub, with a CPF capacity of 5.2 billion cubic feet per day, planned to be expanded by an additional 1.1 billion cubic feet per day.
Additionally, the Utorogu-Ughelli-Okpokonou-Iseni-Brass Hub boasts a capacity of 600 million standard cubic feet per day, with plans for an expansion of 1.2 billion cubic feet per day within the ongoing NAG-3 project.
Moreover, the Assa North Hub is scheduled for a 600 million standard cubic feet per day expansion from its existing capacity of 550 million standard cubic feet per day. For new developments, NNPC has pinpointed hubs that require entirely new Central Processing Facilities, particularly focusing on projects like Anyala-Funiwa-Ofrima-Madu and the Zabazaba-Agbami-Nwa Doro hub.
This gas master plan aligns with President Bola Tinubu’s directive to ensure Nigeria’s energy future is secure through increased production to at least 10 billion cubic feet per day by 2027 and 12 billion cubic feet per day by 2030.
Realizing these goals demands a transformative approach to gas pricing and trading, with NNPC endorsing a willing buyer-willing seller commercial paradigm.
Additionally, the NNPC emphasized the importance of transparency and accountability in executing this significant initiative, underscoring the need for a solid operational framework supported by a cohesive data platform and enhanced data governance to provide digital transparency across the energy value chain.
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