Nigeria’s state oil and gas company is planning to jumpstart an industrial boom in the north of the country thanks to a much-delayed gas pipeline, Reuters has reported, citing the chief executive of the Nigerian National Petroleum Company.
“This is not just about energy,” Bashir Ojulari said. “It’s about industrialisation – fertiliser plants, power generation, and gas-based industries in Kaduna, Kano, Abuja, and Ajaokuta. We expect to see industrial parks spring up.”
The Ajaokuta-Kaduna-Kano pipeline has a price tag of $2.8 billion and has been in the works for years, since its inception back in 2008. Yet the NNPC has now managed to complete a critical section of the infrastructure, the River Niger crossing, moving the project closer to finalization.
Nigeria produces more gas than oil by reserves, yet still burns off a significant share of that gas because gathering and transport systems are missing or unreliable. In October, Nigeria produced about 221 billion standard cubic feet of gas. Roughly 7.6% of that was flared, according to regulator data.
The NNPC is taking steps to curb the flaring, so it can utilize more of the gas it produces. Earlier this month, the company issued gas purchase permits to 28 companies as part of these efforts. The companies will be capturing gas that would otherwise be flared. According to the NNPC, between 250 million and 300 million standard cubic feet of gas could be captured and sold if the projects move forward. Officials say the gas could be used for power generation and industrial demand and could attract up to $2 billion in investment.
In a related update, the NNPC’s Ojulari said that oil production plans for next year involve boosting output to 1.8 million barrels daily from 1.7 million barrels daily this year, expanding further to 2 million barrels daily in 2027.
By Charles Kennedy for Oilprice.com
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