Nigeria’s Domestic Gas Consumption in 2022

Nigeria’s domestic gas consumption in 2022 was approximately 6 billion cubic meters (bcm) as energy companies in the country produced 40.4 billion cubic meters (bcm) of natural gas, with only 15% consumed domestically while exporting or flaring the rest.

The exports largely by Liquefied Natural Gas (LNG) went to markets in Europe and Asia.

Total gas production was down 11% from over 49 bcm a year in 2019 and 2020, according to industry body the Energy Institute.

With over 200 Tcf of proven gas reserves, Nigeria holds the biggest gas deposits in Africa and is currently the continent’s biggest LNG exporter.

To encourage investments in gas infrastructure and increase Nigeria’s domestic gas consumption and gas penetration across the economy, the Nigerian government embarked last year on a “Decade of Gas” initiative.

But several challenges remain to be addressed to meet current needs and address suppressed demand, including gas availability, scattered demand centres, an uncertain macro-economic outlook, and a persistent scarcity of foreign exchange.

Most of Nigeria’s gas output relies on associated gas, a by-product of oil production. Unfortunately, the country is currently faced with severe levels of crude theft that have sent its oil production to historic lows, thereby negatively impacting gas availability.

Such instability has repercussions across its value-chain: earlier this year, Nigeria LNG notably revealed that it was producing at only 68% capacity due to theft of crude oil and vandalism of pipelines, among other problems.

Gas infrastructure also remains inadequate leading to suppressed demand and inadequate supplies.

Seplat Energy a large Nigerian independent producer said at its Eastern operations in OML 53, daily working interest production fell 45.6% to 1,164 bopd in the six months(6M) to June 2023, with evacuation of these volumes largely to the nearby Waltersmith Refinery.

“The ongoing production issues are primarily due to evacuation challenges caused by the unavailability of key delivery lines. Both the Antan-Ebocha delivery line, which supports the Jisike operations, and the Trans Niger Pipeline (TNP), utilised for Ohaji operations, remain unavailable,” Seplat said.

In 2021, natural gas demand in Nigeria reached around 10.12 billion standard cubic meters, according to data by Statista, meaning there is a 40% shortfall using 2021 demand figures which is probably higher now with new demand from the likes of Dangote Refinery.