Gas production experienced a decline in the past year, despite the Federal Government’s injection of a N250 billion intervention fund into fifteen companies.
According to a report from the Energy Institute in collaboration with KPMG, Nigeria witnessed a reduction of 4 billion cubic feet meters in natural gas production between 2021 and 2022. The country’s natural gas production, which had been steadily increasing from 39 billion cubic feet meters in 2012 to 49 billion cubic feet meters in 2020, took a downturn, dropping to 45 billion cubic meters in 2021 and further to 40 billion cubic meters in the last year.
The report highlighted that this decline occurred despite the Federal Government’s disbursement of a N250 billion intervention fund through the Central Bank of Nigeria. Out of this fund, N130 billion was allocated to fifteen companies for the establishment of Compressed Natural Gas (CNG) conversion centers.
The National Gas Expansion Program (NGEP), initiated by the Federal Government, aimed to promote CNG as the preferred fuel for transportation and Liquefied Petroleum Gas (LPG) for domestic cooking, captive power, and small industrial complexes.
Following the NGEP launch, the Central Bank introduced the N250 billion intervention facility to boost investment in the gas value chain, supporting critical sectors of the economy. Notably, the fifteen beneficiary companies, including Dangote Oil Refinery, Nipco Gas Ltd, Hyde Energy Ltd, and others, collectively received N130 billion. These companies are set to face the Senate Committee on gas, chaired by Jarigbe Agom Jarigbe, to provide progress reports and project statuses on Thursday.
The Senate’s summon letter mandates the invited companies to present their progress reports, including project locations and current project statuses.
Chinedu Okoronkwo, the President of the Independent Petroleum Marketers Association of Nigeria, expressed dissatisfaction with the exclusion of his members from the loan. He asserted that if his members had been included, they would have converted over a million vehicles to CNG models by now.
Okoronkwo stated, “None of my members got a kobo from the money. If such funds were given to the right people, by now, many stations would have commenced the CNG conversion centers, and more than one million cars would have been converted.”
As of August, the Nigeria Extractive Industries Transparency Initiative revealed that Nigeria needed $20 billion annually to fulfill the gas expansion plan required to enhance the country’s gas infrastructure.
