As Nigeria continues to struggle with energy shortages despite its vast gas reserves, an energy and infrastructure expert, Mr Obiora Nwokoye, has emphasised the urgent need for investment in gas infrastructure and regulatory reforms.
Speaking at an energy conference in Abuja at the weekend, Nwokoye, the Chief Operating Officer at Field & Wells Services Limited stressed that while gas could play a crucial role in solving Nigeria’s energy deficit, poor infrastructure and policy inconsistencies remain significant obstacles.
“Gas is positioned to be a key solution to the energy deficit, especially for countries like Nigeria,” he said. “Everybody in this industry tells us that Nigeria is an island of oil in an ocean of gas, yet we are not utilising our resources effectively.”
Despite decades of discussions about gas development, Nigeria has focused more on exporting liquefied natural gas (LNG) than meeting domestic energy needs. The first major attempt at monetising gas in 1999 was largely geared toward international markets.
“For years, gas was simply liquefied and sent out to satisfy the energy security of other countries, while Nigeria itself remained in darkness,” Nwokoye stated.
It wasn’t until 2010 that Nigeria began prioritizing domestic gas for power generation, but even with this shift, progress has been slow. Experts argue that a lack of long-term planning and investment has kept the country’s power generation below expectations.
“By 2010, power generation had dropped to below 1,500 megawatts. The country was in darkness,” he said. “Today, we are celebrating 5,000 megawatts of power generation, but let’s not forget that back in 1988, our installed capacity was 5,900 megawatts. Instead of moving forward, we’ve gone backwards.”
The power sector, which is the largest consumer of domestic gas, is heavily reliant on ageing infrastructure and inefficient transmission systems. Without significant upgrades, the country will struggle to meet its growing electricity demand.
Another major challenge is the lack of pipelines and storage facilities to efficiently transport gas across the country. The high cost of importing critical components and the absence of local manufacturing capabilities make gas infrastructure projects expensive and slow to execute.
“We don’t manufacture pipelines, processing plants, or storage facilities. Everything has to be imported, which drives up costs and slows down progress,” Nwokoye noted.
Investors are also discouraged by the financial instability of the sector, particularly the mismatch between funding sources and revenue. Many gas projects require dollar-denominated loans, yet earnings are in naira, making long-term investment risky.
“We’ve been dealing with a mismatch between the currency of our investments—we secure loans in dollars, but revenue is received in naira. On most projects, value starts eroding almost from day one. This makes investment in the sector highly unattractive,” he stated.
Beyond financial concerns, policy inconsistency and excessive bureaucracy have slowed progress in the gas industry. Multiple agencies oversee different aspects of gas projects, often requiring numerous approvals and permits that delay execution.
“On any single gas project, you have to deal with about 30 different agencies,” he explained. “This not only delays progress but also increases costs, as each agency creates its own rent-seeking opportunities.”
To address these challenges, experts recommend that Nigeria’s government take on a stronger coordinating role while allowing the private sector to drive investment. Clear policies, streamlined regulations, and long-term financing solutions are critical to unlocking the full potential of the gas sector.
“We need to rethink how we approach gas development in this country,” Nwokoye said. “The right investments must be made in the right places, ensuring that we produce gas efficiently and distribute it effectively.”
With better infrastructure, clearer policies, and stronger investment frameworks, Nigeria’s gas industry could be a major driver of economic growth. However, without urgent action, the country risks remaining stuck in a cycle of underutilized resources and persistent energy shortages.
“If we get a few things right, Nigeria can literally transform its entire economy using its gas resources,” he concluded. “But if we continue down this path of inaction, we will remain stuck in an energy crisis that holds back our development.”
As a former President of the Energy Club at Lagos Business School, where he organized the Africa Energy Conference, Nwokoye has been actively involved in policy discussions and industry collaborations aimed at solving these challenges. “The government doesn’t have to control every aspect of the industry, but it must act as the conductor of the orchestra, ensuring all parts work together to create a successful outcome,” he said.
With the right policies, investment frameworks, and infrastructure development, Nigeria could transform its economy through gas. However, Nwokoye warns that action is needed now. “If we get a few things right, Nigeria can literally transform its entire economy using its gas resources,” he concluded. “But if we continue down this path of inaction, we will remain stuck in an energy crisis that holds back our development.”
