A significant gas to power market opportunity
Nigeria has one of the lowest rates of grid-based electricity generation capacity per capita in the world, according to the Federal Government’s Power Sector Recovery Programme Report of April 2017. Nigeria has a population of approximately 216 million1 people with an installed power generation capacity of approximately 13,000 MW2, but with a national electricity grid transmission capacity of 7,500 MW2. However, approximately 4,100 MW is actually dispatched on a daily basis due to combined constraints in gas supply, electricity transmission and distribution. The young population is growing at a rate of 2.5% per annum and is forecast to reach 392 million people in 2050, becoming the world’s fourth most populous country. The population is urbanising rapidly and the country is beset with chronic electricity shortages. Based on the country’s GDP and global trends, electricity consumption is expected to grow to 90,279 MWh by 20403, approximately seven times higher than it was in 2018.
Electricity power consumption (KWh per capita)
Sources: ourworldindata.org
Power capacity vs population
Sources: CIA World Factbook and worldpopulationreview.com
Nigeria’s Decade of Gas
On 29 March 2021 HE President Muhammadu Buhari, together with Vice President Yemi Osinbajo and the Minister of State for Petroleum Resources, Timipre Sylva, formally launched a new initiative declaring 2021 to 2030 as “the Decade of Gas Development for Nigeria”. The mission of the Federal Government of Nigeria (the “FGN”) is to:
- Diversify the nation’s oil and gas industry through the strategic exploitation of its vast and easily developed natural gas resources; and
- Transform Nigeria into an industrialised nation driven by gas through projects and policies such as the Presidential Power Initiative, the National Gas Expansion Programme (NGEP), the Nigerian Gas Transportation Network Code (NGTNC), the Nigerian Gas Flare Commercialisation Programme (NGFCP) and the National Gas Policy (NGP).
1 IMF 2021 Statistics, World Population Review 2022
2 Nigerian Electricity Regulatory Commission
3 CIA World Fact Book 2021