Despite Nigeria’s ambitious push to harness its vast gas resources, industry experts say inadequate funding continues to pose a major threat to the country’s ability to meet its $1.5 billion annual gas export target.
This warning comes in the wake of a landmark Gas Sales and Purchase Agreement (GSPA) signed between the Nigerian government and energy giants Shell, TotalEnergies, and Eni. The deal will supply 270 million standard cubic feet of gas per day to the planned $3.5 billion Brass Fertiliser and Petrochemical Plant in Bayelsa State—one of the largest investments in Nigeria’s gas sector to date.
The agreement, according to government sources, is expected to significantly boost export earnings, generate thousands of jobs, and strengthen the country’s industrial base. But analysts argue that without adequate financing, infrastructure, and regulatory stability, these gains could remain unrealized.
Fiscal Incentives Not Enough?
The government has recently introduced a series of policy reforms aimed at attracting investment. These include exemptions from Value Added Tax (VAT) on key energy-related products like diesel, compressed natural gas (CNG), and electric vehicles. New tax credits have also been offered for deepwater oil and gas projects.
Yet industry stakeholders say more must be done.
Petroleum policy analyst Adebayo Alamutu explained that gas infrastructure projects are capital-intensive and require a stable investment climate. “We’re seeing efforts to de-risk the sector, but access to funding remains a serious constraint,” he said, adding that global oil price fluctuations and geopolitical tensions are further complicating investor confidence.
Environmental and Infrastructure Concerns
Environmental sustainability and infrastructure deficits also remain major challenges.
Oil and gas researcher Dr. Adeola Yusuf noted that greenhouse gas emissions from Nigeria’s petroleum industry continue to attract global scrutiny. “To attract serious investors, Nigeria must tighten its environmental regulations and invest in clean energy technologies,” she said.
She also flagged ongoing gaps in the country’s gas pipeline and distribution networks, which limit the reach of supply and reduce efficiency. “Infrastructure is key. The government needs to accelerate projects like the Ajaokuta-Kaduna-Kano (AKK) gas pipeline to support both domestic use and exports.”
Public-Private Partnerships Vital
Professor Wumi Iledare, a petroleum economist, believes that collaborative financing models hold the key to long-term success. “Government incentives are important, but execution will rely heavily on public-private partnerships,” he said.
He praised recent efforts to promote cooperation between the public and private sectors, pointing to the GSPA with Shell, TotalEnergies, and Eni as a positive example. “If fully realized, this deal could be a game-changer—not just for exports, but for energy security and economic diversification.”
Looking Ahead
With the 2025 edition of NOG Energy Week around the corner, energy leaders are expected to sharpen focus on practical financing models, investment-friendly policies, and new technologies to move Nigeria’s gas ambitions forward.
Despite the hurdles, stakeholders remain cautiously optimistic. The hope is that with the right mix of policy support, investor engagement, and infrastructural development, Nigeria can fully unlock the potential of its natural gas reserves—and hit that much-anticipated $1.5 billion export revenue mark.
