Paul Igbinoba
This article makes a strong case for the establishment of a Ministry of Gas Development and Industrialisation by the President Bola Ahmed Tinubu-led Federal Government of Nigeria. This is to enable Nigeria to fully harness the 35-year window of opportunity presented by its 2060 net zero emission target for the maximum development of its gas resources for power generation, industrialisation and household utilisation.
The article follows two earlier pieces titled “Upping the ante of Nigeria’s gas ambition” (Part 1) and (Part 2), which reviewed the significant progress recorded in the last 30 months under the Decade of Gas initiative. That progress includes the completion or near completion of three major gas pipeline projects and the expected completion of NLNG Train 7 in the first quarter of 2026, with commissioning later in the year. The earlier articles recommended a radically revised and upgraded 10-year gas development plan ending in 2035, targeting production of 20 billion cubic feet per day (bcf/d), up from 7.5 bcf/d projected for 2025.
There currently exists the office of the Minister of State Petroleum Resources (Gas). What is being proposed is the elevation of that office to a full Ministry of Gas Development and Industrialisation. While the current portfolio reflects gas development and industrialisation, a full-fledged ministry would significantly enhance the mandate and capacity required to drive Nigeria’s gas ambition with a mission-focused approach aimed at transforming the country into a gas-driven economy. This transformation could enable Nigeria’s gas export earnings to surpass oil export earnings within a defined timeframe, given that the country possesses roughly twice as much crude-oil-equivalent proven gas reserves as crude oil reserves.
The overarching objective of Nigeria’s gas ambition, as articulated in the Decade of Gas initiative, is to rapidly develop the country’s over 210 trillion standard cubic feet of proven gas reserves for domestic consumption, industrialisation and export, positioning Nigeria as a major gas producer, a major domestic gas consumer and a major gas exporter. The proposed ministry would therefore be mandated to aggressively pursue accelerated gas sector development for rapid domestic adoption and industrialisation, alongside rapid expansion of gas exports.
Gas industrialisation in Nigeria entails the strategic coordination of its vast gas assets for gas-based industrial growth. This includes expanding natural gas use for power generation, deploying gas as a cleaner and cheaper energy source for manufacturing, and utilising gas as feedstock for additional fertiliser plants, petrochemical plants, methanol plants and small-scale LNG plants for domestic use. It also involves expanding large-scale LNG and floating LNG plants to increase exports and diversify foreign exchange earnings away from crude oil dependence. Achieving this will require a comprehensive nationwide gas pipeline infrastructure backbone. The Nigerian Morocco Gas Pipeline Project, for instance, is expected to materialise in phases over two decades.
Several justifications support the creation of a Ministry of Gas Development and Industrialisation. Nigeria currently produces only about 1 to 1.5 percent of its proven gas reserves, despite ranking eighth globally in reserves. This indicates that the sector remains significantly underdeveloped and in need of transformation. Although Nigeria holds the eighth largest proven gas deposits, it ranks around fifteenth in production. Moreover, while the country has more gas than crude oil, crude oil continues to dominate export revenues, contributing 80 to 90 percent more foreign exchange than gas.
Natural gas has been designated Nigeria’s transition fuel. The country must therefore maximise the benefits of its gas resources within the 35-year window before the 2060 net zero commitment takes effect. Accelerated gas development is also critical to unlocking Nigeria’s economic potential, particularly its aspiration to achieve a $1 trillion GDP by 2030. Additionally, Nigeria requires a globally visible focal point for gas investment and development. If a Ministry of Livestock Development can be established alongside the Ministry of Agriculture, then a Ministry of Gas Development and Industrialisation can similarly exist alongside the Ministry of Petroleum Resources.
The proposed ministry would aim to position and develop the Nigerian gas sector as distinct from, though closely linked to, the crude oil sector. It would prepare a 10-year strategic development plan covering 2026 to 2035 and a 25-year perspective plan extending from 2026 to 2060. It would set achievable timelines to raise the ratio of gas production to proven reserves from the current 1 to 1.5 percent to 5 percent and eventually to 10 percent. The ministry would also work collaboratively with other ministries, departments and agencies to strengthen the fiscal framework and improve the investment climate in order to make Nigeria’s oil and gas sectors globally competitive.
Further responsibilities would include developing business cases across the entire gas development and commercialisation value chain in collaboration with sector stakeholders, including professional and trade bodies, investor groups, financial institutions, local and international oil and gas companies, and international organisations such as the International Energy Agency, the Gas Exporting Countries Forum and the African Energy Council. The ministry would identify and promote specific gas processing plants, small local LNG facilities for domestic use, large-scale LNG and floating LNG plants for export, fertiliser plants, petrochemical plants and methanol plants. It would also facilitate the creation of gas-based industrial parks nationwide, develop 10-year and 25-year national gas infrastructure master plans covering major upstream pipelines and downstream distribution networks to industrial zones and residential estates, host local gas investment conferences, and undertake international gas investment roadshows.
This mandate is not exhaustive. Essentially, the Ministry of Gas Development and Industrialisation would serve as Nigeria’s dedicated gas sector development and investment promotion agency. To succeed, it would need to operate with a less bureaucratic and more proactive project development, management and investment promotion framework.
If this proposal is deemed compelling, the President may need to reconsider retaining the Petroleum Resources portfolio and instead appoint two substantive ministers: one for Petroleum Resources and another for Gas Development and Industrialisation.
Paul Igbinoba is Team Lead/CEO at ProServe Options Consulting, Lagos
