PwC’s Verdict: Decade of Disappointment in Nigeria’s Gas Discoveries

InfoStride News reported that PricewaterhouseCoopers (PwC) characterized gas discoveries in Nigeria as disappointing over the past decade, despite the country being a major gas consumer, based on PwC’s Africa Energy Review report from November 2023.

The report highlighted limited gas discoveries in West Africa since 2019, with notable findings in Mauritania and Senegal between 2015 and 2019. These countries are set to begin operations in 2024 after monetizing their discoveries.

In addressing domestic energy challenges, the report emphasized the potential impact of implementing domestic gas allocation, which could reduce reliance on diesel generators and coal power generation.

The Trans-Saharan Gas Pipeline (TSGP), a joint project between Algeria and Nigeria, signed an MOU in 2022 but faces delays due to political instability, investor funding concerns, and operational safety issues.

The Nigeria-Morocco Gas Pipeline (NMGP), originally planned to traverse Nigeria, Benin, Togo, and Ghana, now includes Senegal, Mauritania, and Guinea-Bissau. The expansion requires extensive collaboration and administration, and the EU may explore alternative gas agreements.

Despite Nigeria being the top gas consumer in West Africa, inadequate infrastructure hampers market growth. The report noted the challenge of limited local gas markets in neighboring countries and emphasized the need for improved infrastructure, highlighting the expansion of Compressed Natural Gas (CNG) networks.

The report discussed challenges in Nigeria’s power sector, including rolling blackouts, reliance on generators, and a national grid capacity of 13,128MW, significantly lower than South Africa and Egypt. The Dangote Refinery, expected to start operations in Q4 2023, was identified as a potential game-changer, reducing refined product imports and contributing $20 billion to $30 billion to the Nigerian economy. The refinery aims to be self-sufficient with 435MW of Independent Power Plants (IPPs) and a deep seaport.

In conclusion, the report emphasized Nigeria’s advantageous prospects as the most populous nation in Africa, with a pre-established domestic market and a population of 219 million. It called for collaborative efforts between the government and businesses to address obstacles such as legislation, corruption, governance, and transparency, ensuring that the 20% domestic gas production is utilized for public benefit.