Nigeria’s gas ambitions face $22bn pipeline funding gap under new NNPC master plan

• NNPC says up to $22bn is needed to build new gas pipelines nationwide.
• Gas Master Plan targets 10bcf/d production by 2027 and 12bcf/d by 2030.
• Nigeria still flares over 10% of its gas despite holding Africa’s largest reserves.

Nigeria will need as much as $22 billion in new investments to build the gas pipelines required to unlock its massive natural gas reserves, according to the Nigerian National Petroleum Company Limited’s Gas Master Plan 2026, a document reviewed by The PUNCH.

The funding requirement reflects the scale of infrastructure needed to move gas from production hubs to power plants, factories, households and export terminals, as the federal government pushes to reposition gas as the backbone of Nigeria’s energy and industrial future.

Although Nigeria holds Africa’s largest proven gas reserves, estimated at about 210 trillion cubic feet, production and commercialisation remain far below potential, leaving the country unable to fully leverage gas for power generation, industrial growth and foreign exchange earnings.

Pipeline bottlenecks threaten gas expansion goals

The master plan notes that Nigeria currently operates just over 2,500 kilometres of gas pipelines, far below what is required to support growing domestic demand and export ambitions. Major projects such as the Ajaokuta-Kaduna-Kano pipeline, the OB3 pipeline and other transmission links are expected to form the backbone of the next phase of expansion.

Altogether, NNPC estimates that planned pipeline infrastructure under development could require up to $22bn in capital, making transportation one of the most expensive and critical gaps in Nigeria’s gas value chain.

The report also warns that gas demand is projected to exceed supply in all scenarios by 2030, unless upstream development, especially non-associated and deep-water gas, accelerates significantly.

Nigeria’s gas wealth still largely untapped

Despite ranking among the top 10 gas-rich countries globally, Nigeria remains only 16th in gas production. In 2025, daily output stood at about 7.5 billion standard cubic feet, but only roughly 60 per cent of that, around 4.6bcf/d, was commercialized.

More than 10 per cent of produced gas was flared, making Nigeria the world’s seventh-largest gas flaring country, while nearly 30 per cent was reinjected. Over the past five years, commercialised production has hovered between 4.1bcf/d and 4.7bcf/d, highlighting persistent structural constraints.

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The new plan sets ambitious targets of more than 10bcf/d by 2027 and 12bcf/d by 2030, while aiming to attract over $60bn in investments across gas production, processing, transportation and markets.

NNPC shifts to integrated gas hubs model

Speaking at the Nigerian International Energy Summit, Ekpei Ukam, focal person of the NNPC Gas Master Plan Implementation Assurance Team, said the company is abandoning fragmented, project-by-project gas development in favour of an integrated gas hub approach.

He explained that about 23 existing gas hubs across the country have been identified for coordinated development, allowing better commercial alignment, cost optimisation and flexibility between domestic supply and exports.

Under the new framework, hubs will be structured to serve both local industries and export markets, especially liquefied natural gas, which currently accounts for about 70 per cent of Nigeria’s gas exports and is dominated by Nigeria LNG.

Power, industry and exports drive future demand

The master plan projects that domestic gas demand will continue to be driven largely by power generation, gas-based industries and commercial users, while export growth will remain anchored in LNG.

Although compliance with Domestic Gas Delivery Obligations has improved, rising from about 50 per cent five years ago to nearly 70 per cent in 2024, the document warns that infrastructure gaps and weak power sector economics still threaten long-term sustainability.

NNPC said the Petroleum Industry Act has provided regulatory clarity that previous gas development plans lacked, helping improve investor confidence and project bankability.

Ukam added that an implementation assurance framework has been introduced to track delivery across joint venture partners and upstream infrastructure projects, ensuring gas reaches end-users efficiently.

“This master plan demonstrates a clear pathway to achieving Nigeria’s gas targets,” he said. “It is designed to serve as the roadmap for developing the gas sector and closing the gap between Nigeria and its global peers.”