The Federal Government has taken a major step towards easing pressure in Nigeria’s gas-to-power chain, with the National Economic Council (NEC) approving N185 billion to clear validated legacy debts owed to upstream gas producers.
The Minister of State for Petroleum Resources (Gas), Dr Ekperikpe Ekpo, disclosed the development on Friday in Abuja, saying the settlement was expected to improve gas availability for power generation while restoring confidence among investors operating in the sector.
According to Ekpo, the decision goes beyond simply paying outstanding bills. He said clearing the debts would help restore commercial discipline across the gas value chain, improve the reliability of supply and reassure investors that Nigeria was committed to creating a more predictable gas market.
The minister also highlighted progress on some of the country’s major gas infrastructure projects. He said the Obiafu-Obrikom-Oben (OB3) Gas Pipeline had reached 100 per cent completion, with pre-commissioning activities concluded ahead of the commencement of first gas. The pipeline has the capacity to transport about two billion cubic feet of gas daily and is expected to unlock more than 500 million standard cubic feet of additional domestic gas supply each day.
The Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline, another major project expected to reshape domestic gas distribution, is also nearing completion, with Ekpo putting its progress at about 95 per cent.
Beyond government-funded infrastructure, the minister said the Midstream and Downstream Gas Infrastructure Fund (MDGIF) had become a major vehicle for attracting private capital into the sector. Although the government committed N671 billion to the fund, it has reportedly leveraged that investment to attract about N1.6 trillion in private-sector funding for 31 projects involving 205 infrastructure assets.
The projects, Ekpo said, have the combined capacity to deliver approximately 475 million standard cubic feet of gas per day to the domestic market, potentially strengthening supplies for industries, households and power generation.
Looking ahead, the Federal Government is targeting about $30 billion in gas investments by 2030, alongside an aggressive expansion of cleaner gas-based energy solutions. Ekpo said the number of vehicles converted to Compressed Natural Gas (CNG) had jumped from roughly 11,000 in 2023 to more than 120,000, with the government aiming to push the figure to at least one million vehicles and establish as many as 1,000 refuelling stations nationwide.
The government is also targeting wider access to Liquefied Petroleum Gas (LPG), with a goal of reaching five million additional households by 2030. Ekpo said the distribution of 27,000 free LPG cylinders in each state was already underway as part of efforts to encourage cleaner cooking and reduce dependence on traditional cooking fuels.
In another long-term move, President Bola Tinubu has approved the extension of the National Grassroots LPG Penetration Programme to 2060. Ekpo said the extension would provide a sustained framework for expanding cleaner cooking energy access across the country.
The government is equally turning its attention to gas that is currently wasted through flaring. Ekpo disclosed that 42 companies had been awarded contracts to convert flare gas into useful products, including electricity, industrial feedstock, LPG and CNG.
He said Nigeria would continue to deploy regulatory and commercial measures aimed at bringing routine gas flaring to an end by 2030.
Ekpo said the administration’s gas strategy was built around increasing production, expanding infrastructure, attracting investment and ensuring that gas supplies to the power sector become more dependable. He also stressed the importance of ensuring that communities in producing areas benefit more meaningfully from the country’s gas resources.
With Nigeria seeking to deepen its position in the global energy market, the minister said the country would use its growing participation in international energy organisations to push for greater investment in natural gas, transparent energy markets, affordable access to energy and what he described as a just energy transition.
The N185 billion debt settlement, alongside the infrastructure and investment drive, therefore places the gas sector at the centre of the Federal Government’s broader effort to address power supply challenges, expand domestic energy access and attract fresh capital into Nigeria’s energy industry.
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