Nigeria seeking investment ‘to develop gas-based industries hub’

NNPC group managing director Maikanti Baru told the Nigerian Gas Association’s 10th international conference and exhibition in Abuja that around $35.4bn is needed to fund activities including gas exploration and production, power plant projects and flare gas commercialisation.

Baru also said investment opportunities worth an estimated $51bn exist in Nigeria’s midstream and downstream gas sector.

A further $16bn worth of investment will be needed to support infrastructure projects for the gas sector including central gas processing facilities, liquefied petroleum gas plants and gas transmission services, Baru said.

“Beyond growing gas for the power sector, there has been a strategic positioning of the sector to support massive gas based industrialisation,” Baru said. “The intent is to position Nigeria as a regional hub for gas-based industries such as fertilisers, methanol, petrochemicals and central processing facilities.”

Baru said a “first effort” towards the ambitious plans for the gas sector is a planned 30 square kilometre gas-based industrial park at Ogidigben, in Delta State, known as the Gas Revolution Industry Park (Grid). Baru said the facility “will be Africa’s largest purpose built gas park supporting gas based industries”.

The NNPC unveiled plans for the Grid in May 2013, however the project has been beset by delays and a ground-breaking ceremony for the project did not take place until last March.

Former Nigerian president Goodluck Jonathan said at the ceremony: “It is my intention to make the gas park most investor-friendly. It will be an export processing zone to attract the global market. This project will meet world standard.”

Jonathan said the Grid will “be Africa’s largest gas and fertiliser export processing zone when completed and generate thousands of jobs for citizens”. Jonathan said around 3,000 jobs would be created during the construction phase. He also announced the setting up of a special steering committee to oversee the project and report on progress to the Federal Executive Council on a weekly basis.

According to the US Energy Information Administration (EIA), Nigeria was the world's fourth-largest exporter of liquefied natural gas in 2015. The EIA said Nigeria’s natural gas sector “is restricted by the lack of infrastructure to commercialise natural gas that is currently flared”.

A report released last year from consultancy Ernst & Young (80-page / 2.4MB PDF) said Nigeria had been the largest recipient of foreign direct investment (FDI) in Africa over the last decade, 80% of which had been invested in the oil and gas sector.

A separate report, ‘Landscape for Impact Investing in West Africa’ (56-page / 1.62 MB PDF), said West Africa is becoming an increasingly attractive regional market for “dynamic impact investing’’ on the continent. The report said West Africa still accounts for “a significant share of sub-Saharan Africa’s (SSA’s) FDI, attracting an average of 35% of FDI inflow in SSA between 2004 and 2013”.

Nigeria attracted around half of the region’s FDI inflow and “is currently the third largest recipient of FDI in SSA”, behind South Africa and Mauritius, the report said.

Towards the end of last year, Chinese steel pipe manufacturer Jiangsu Yulong Group broke ground for a major manufacturing plant in Nigeria's Lagos Lekki free trade zone, aimed at supplying the country’s developing oil and gas industries.