Nigeria’s push to build a gas economy is stalled due to price controls and investor risks, according to Chichi Emenike, acting managing director and gas asset manager at Neconde Energy Ltd. Emenike stated that investors are seeking reasonable and predictable returns, which are not being met due to the current pricing system.
Emenike emphasized that investors are not looking for windfalls, but rather a reliable market where customers pay consistently. She noted that without this, the capital needed for the government’s “Decade of Gas” agenda will not be available.
The domestic market in Nigeria is not ready to absorb the investment needed in the gas sector, with a significant shortfall in infrastructure, including pipelines. Emenike explained that producers are turning to compressed natural gas and liquefied natural gas for last-mile delivery, but these routes also face challenges due to the country’s stranded gas reserves.
The economics of extracting gas are capital-intensive and priced in dollars, from drilling to laying pipelines and building plants. Emenike criticized the government’s price-setting, stating that it does not take into account the costs of projects, including financing and currency risks.
Emenike credited the Petroleum Industry Act with moving investors in the right direction but stated that more needs to be done to fully liberalize the market. She argued that transparent contracts, clear offtake frameworks, and payment security are necessary to unlock capital and widen energy access.
The conference, which included policymakers, regulators, and operators from the oil, gas, and power sectors, discussed strategies for sustainable growth. Emenike framed the stakes in economic terms, stating that gas can guarantee economic security, but only if there is a paying market.
Others on the panel included Tunji Oyebanji, former chairman of the Major Energies Marketers Association of Nigeria; Clement Isong, the association’s chief executive officer; and Emmanuel Omuojine, managing director of Rainoil Ltd. Emeka Ene, chairman of Oida Energy Group, moderated the session.
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