The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has cautioned that Nigeria may face a gas supply shortfall of 3.1 billion cubic feet per day (bcf/d) within the next six years unless urgent steps are taken to upgrade gas infrastructure and increase investments in renewable energy.
Komolafe made this known while speaking at the NAEC Energy Conference 2024 in Lagos on Thursday.
According to him, the current growth in gas demand surpasses supply, primarily due to the rise in domestic demand, which has been facilitated by improvements in domestic supply obligations.
Represented at the event by Paul Osu, Director of the Lagos Regional Office of NUPRC, Komolafe stated that gas demand is projected to grow at a compound annual rate of 16.6 per cent, which could lead to a potential gas supply crisis, with a shortfall of 3.1 bcf/d expected by 2030 under the ‘Base Case Demand and Supply’ scenario.
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He highlighted that natural gas production is expected to increase from 8.0 billion cubic feet per day (bcfd) in 2020 to 12.2 bcfd by 2030, driven by major projects such as NLNG Train 7 and Train 8, the Nigeria-Morocco pipeline, and the Ajaokuta-Kaduna-Kano (AKK) Natural Gas Pipeline Project, among others, under the ‘high case supply’ scenario.
However, he noted that this would still fall short of meeting the projected ‘high case demand’ scenario, which is estimated at 22.2 bcfd by 2030.
He said, “In just a decade, the demand landscape could change exponentially, especially if the power sector challenges are resolved. The import of this is to showcase opportunities in gas development in the Nigerian upstream sector and the need to complement hydrocarbon developments with renewables.”
Komolafe emphasised that the NUPRC is committed to creating a favourable operating environment and urged investors to capitalise on the sustainability provisions in the Petroleum Industry Act (2021), alongside the attractive fiscal incentives available.
Stakeholders at the event estimated that the country would require annual investments of approximately $20 billion to address its infrastructure deficit.
