• Regulation, market integration to enable $50bn gas investments

Sopuruchi Onwuka

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has declared an ambitious roadmap to transform Nigeria into West Africa’s energy hub, targeting $30 billion to $50 billion in fresh oil and gas investment by 2030 through regulatory reforms, infrastructure expansion and regional market integration.

The Authority’s Chief Executive, Rabiu A. Umar, unveiled the strategy at the OTL Africa Downstream Energy Week 2026 at the Oriental Hotel, Lagos, where he outlined measures to strengthen energy security, promote fair competition and harmonise energy market regulations across West Africa.

In his keynote address, titled “Secure Energy, Shared Prosperity,” Umar said Nigeria’s transition from an energy importer to a regional supply hub would depend on reliable infrastructure, transparent market rules, adequate strategic reserves and stronger regional cooperation.

A major regulatory milestone was the launch of Revision 2 of the Gas Network Code on October 26, 2026. First introduced in 2020 and revised in 2024, the Code provides for open, non-discriminatory access to gas transportation infrastructure and transparent, cost-reflective tariffs. The Authority also reported a 30 per cent reduction in gas imbalance on the Western Network in the first half of 2026, alongside improved measurement at network entry and exit points.

Umar said major pipeline projects were approaching completion, with the Obiafu-Obrikom-Oben (OB3) pipeline 96 per cent complete as of September 2026, the East-West Offshore Gas Gathering System (ELPS) midline compressor 97 per cent, the Ajaokuta-Kaduna-Kano (AKK) pipeline 84 per cent, the Odidi-Warri expansion 78 per cent and the Escravos-Odidi pipeline 30 per cent.

Completion of AKK and OB3 is expected to add 2.0 billion cubic feet per day (Bcf/d) to the existing 2.2 Bcf/d capacity of the ELPS system, raising total gas transportation capacity to 4.2 Bcf/d and strengthening connections between southern gas supplies and northern markets.

Nigeria holds about 215 trillion cubic feet of gas, Africa’s largest reserves, and 37 billion barrels of crude oil. However, only about 52 per cent of its installed gas processing capacity of 16.2 Bcf/d is being utilised, highlighting the need for investment in processing, transportation and distribution.

Of the 8.394 Bcf/d of gas processed, 62 per cent went to midstream and downstream activities, while 38 per cent was used upstream or flared. The breakdown included 2.066 Bcf/d for the domestic market, 2.760 Bcf/d for Nigeria LNG Limited (NLNG), 0.279 Bcf/d for the Escravos Gas-to-Liquids facility and 0.134 Bcf/d for exports through the West African Gas Pipeline.

Umar also highlighted growing demand for liquefied petroleum gas (LPG), with consumption rising 33 per cent above the benchmark to 5.2 kilotonnes per day, against supply of 4.7 kilotonnes per day.

On energy security, he disclosed that Nigeria had 53.2 days of aviation fuel stocks and 49.7 days of diesel stocks as of September 2026, both above the 30-day threshold. Petrol stocks stood at 23.9 days, while LPG stocks covered 15.9 days, leaving both below target.

Petrol supply averaged 38.7 million litres daily against consumption of 44.4 million litres, with the shortfall met from existing stocks. He said feedstock security was being supported through the Domestic Crude Supply Obligation and the Naira-for-Crude arrangement.

The Authority is also strengthening competition and consumer protection through a memorandum of understanding with the Federal Competition and Consumer Protection Commission (FCCPC) and draft Anti-competition Regulations 2026, following consultations on September 22.

Other measures include field product-quality testing in Port Harcourt and a tripartite memorandum of understanding with Bureau Veritas and Ace Energy and Power Solutions to establish a National Reference Laboratory to International Organization for Standardization standards. The Port Harcourt laboratory has been upgraded, while nine others are being modernised. The Authority is also expanding Gas Distribution Licences through a nationwide mapping exercise.

Umar said the projected $30 billion to $50 billion investment requirement would support gas processing, fertiliser production, LPG and flare-gas commercialisation. Capacity expansion plans include raising NLNG’s output from 22 million tonnes per annum (MMTPA) to 30 MMTPA through Train 7, increasing Indorama fertiliser capacity from 4.38 MMTPA to 5.84 MMTPA with Train 4, and expanding the LPG market from 1.8 MMTPA to 4.0 MMTPA.

He identified depots, jetties, coastal shipping and the revival of petroleum product pipelines as additional investment opportunities under public-private partnerships.

For regional integration, the NMDPRA proposed a three-phase roadmap. The 2026–2027 phase will focus on enforcing the Economic Community of West African States’ 50-parts-per-million fuel standard, establishing regional data-sharing protocols and conducting joint border quality checks.

The 2028–2029 phase envisages mutual recognition of licences, common cross-border pipeline and storage codes, and the application of African Continental Free Trade Area rules to refined petroleum products. By 2030, the Authority aims to establish coordinated regional strategic stocks, a pathway towards 10-parts-per-million AFRI-6 fuels and a credible West African reference price.

“Convergence, not uniformity: each country keeps the right to secure supply to its own citizens,” Umar stressed.

He outlined five commitments: maintaining 30 to 45 days of supply sufficiency and developing a National Strategic Stock; securing feedstock through the Domestic Crude Supply Obligation and Naira-for-Crude arrangements; accelerating infrastructure development through public-private partnerships and the Midstream and Downstream Gas Infrastructure Fund; ensuring predictable licensing and competition; and publishing monthly market data.

The commitments will be implemented through Project NEXUS, which Umar described as a framework for a firm, fair and fast regulator.

He urged refiners to prioritise domestic supply, marketers and logistics companies to invest in storage and fair dealing, financiers to support infrastructure, communities and security agencies to protect energy assets, and African partners to align regulations in building an integrated regional energy market.

He said the ultimate objective was to turn “Made in Nigeria” into “secured for Africa.”