Gas
Nigeria gas ambitions face pricing and infrastructure hurdles
Industry executives warn that price controls and infrastructural deficits are hindering investment in Nigeria's domestic gas sector.
Key points
- Neconde Energy warns that government price controls and payment risks stall capital deployment.
- Meren Energy plans further investments and drilling across offshore Nigerian assets.
- Analysts emphasize the need for market liberalisation to secure predictable investor returns.
Nigeria faces critical hurdles in its push to expand its gas economy, with industry leaders pointing to regulated pricing and infrastructure gaps as major deterrents for investors. According to BusinessDay reporting, Chichi Emenike of Neconde Energy highlighted these challenges during a recent industry event in Abuja, noting that capital will not flow without reliable payment frameworks and market liberalisation.
Emenike explained that gas extraction and processing involve heavy, dollar-denominated expenses spanning well drilling and pipeline construction. Government price-setting fails to account for these financial realities, exposing operators to severe currency risks and extended payback timelines. While acknowledging that the Petroleum Industry Act has improved the investment climate, she stressed that further reforms are required to create a bankable market.
Offshore investments continue
Meanwhile, upstream operations continue to draw capital from independent firms. DirectorsTalk Interviews reported that Meren Energy intends to pursue further asset acquisitions and licensing opportunities within the country. The company has directed approximately 11 billion US dollars into the Agbami, Akpo and Egina fields over the past two decades, alongside 4 billion US dollars paid in taxes and royalties.
Meren Energy is preparing for new drilling campaigns in the fourth quarter of 2026, starting with an appraisal well at Ikija, followed by broader infill drilling across Agbami from 2027 to 2028. These initiatives aim to sustain and boost output from deepwater assets alongside ongoing reservoir management.
Why it matters
These developments highlight the complex landscape of Nigeria's energy sector, where upstream oil and gas production attracts substantial foreign capital while the domestic gas market struggles with structural bottlenecks. According to World Bank figures from 2025, fuel exports account for 85.9 percent of Nigeria's merchandise exports, underscoring the macro-economic importance of hydrocarbons compared to a global average of 9.5 percent.
For policymakers and investors, unlocking the domestic gas economy is crucial for industrialisation and broader energy access. World Bank data for 2024 indicates that only 62.5 percent of Nigeria's population has access to electricity, and just 28 percent have access to clean cooking facilities, trailing far behind global averages of 91.9 percent and 75.4 percent respectively. Resolving pricing disputes and infrastructure deficits will determine whether domestic gas can bridge these developmental gaps.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
72.9% of electricity in Nigeria came from gas in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
