Olufemi Adeyemi 


In the first half of 2024, Nigeria wasted a significant amount of natural gas through gas flaring. This wasted gas could have been utilized to generate sufficient electricity to power over three million households, as per an analysis conducted by industry experts.

The National Oil Spill Detection and Response Agency (NOSDRA) estimates that approximately 148.7 million standard cubic feet of gas were flared during that period.

Based on data from NOSDRA’s Nigerian gas flare tracker, the flared gas had the potential to generate 3,401.83 megawatts (MW) of electricity. According to the United States Energy Information Association, one megawatt of electricity can power approximately 1,000 households. Therefore, the flared gas could have provided electricity to at least 3.4 million households.

The value of the flared gas Is estimated to be around $360 million, which could have alleviated some of the foreign exchange challenges faced by the country.

Nigeria has been grappling with a protracted scarcity of foreign exchange, leading to a deceleration in economic growth, depreciation of the naira, and an exacerbation of inflationary pressures.

According to a report by PricewaterhouseCoopers titled ‘Privatisation in the Power Sector: Navigating the Transition,’ a general guideline for industrialized nations is approximately 1MW of power generation capacity for every 1,000 residents.

In Nigeria, the installed power generation capacity is roughly 13,014.14MW, with an operational capacity of about 4,000MW, as reported by the Nigeria Electricity System Operator. Consequently, the issue of power generation poses a considerable challenge for the country.

To provide further context, over 100 million Nigerians do not have access to electricity, and more than 75 percent of the population lacks access to clean cooking energy.

Olu Verhejen, special adviser to President Bola Tinubu on energy, stated, “Even with numerous interventions and subsidies, more than 100 million Nigerians remain without reliable and affordable electricity.”

She emphasized that this lack of access significantly hinders citizens' potential for meaningful income growth, diminishes productivity, and constrains economic development. “The correlation between electricity usage and economic progress is well-documented across various countries and income levels.”

Nigeria, the largest oil producer in Africa, faces significant energy challenges. The frequent blackouts affecting various communities underscore the inefficiencies that beset the nation's energy sector. Recently, the national electricity grid suffered a partial failure, leaving several regions in darkness.

This incident marked the seventh total system collapse in 2024, resulting in widespread blackouts across the country. Since the privatization of the grid ten years ago, it has experienced over 141 collapses, revealing ongoing problems within the power sector.

Experts highlight the critical necessity for the commercialisation of gas, the implementation of stricter regulations, the advancement of floating liquefied natural gas (FLNG) technology, and amendments to the Petroleum Industry Act to effectively tackle these challenges.

Preye David Orodu, the lead engineer at KEOT Synergy, underscored the significance of taking tangible steps towards gas commercialisation, which should be bolstered by a robust infrastructure framework.

Orodu pointed out that a portion of the liquefied petroleum gas (LPG) consumed domestically is sourced from imports, which introduces unpredictability into the supply chain. "Encouraging gas commercialisation will help us draw in investments, thus lessening our dependence on imports," Orodu stated.

Bala Zakka, an energy analyst, asserts that utilizing natural gas, recognized as a cleaner energy source, has the potential to stimulate investment in gas turbines and facilitate electricity generation. He believes that Nigeria, as a member of both the Organization of Petroleum Exporting Countries and the Gas Exporting Countries Forum, is not maximizing its efforts in this regard.

Kelvin Emmanuel, an energy analyst, highlighted the importance of deregulating gas prices to encourage operators to commercialize gas that is currently being flared, thus mitigating both environmental and economic losses.

He pointed out that if the price of gas per standard cubic foot is less than the penalties for flaring, operators are likely to choose fines over re-injection.

To tackle this issue, Emmanuel proposed the development of floating LNG vessels, which could decrease the costs associated with standard train construction, minimize the risks of vandalism, and enhance the collection of associated gas from well-heads.

He believes that this strategy would eliminate the necessity for flaring or re-injection, leading to a more sustainable approach to gas utilization.