Yemisi Izuora
Nigeria is set to witness a major leap in its gas industry production capacity because authorities have set a predictable price target that will support investors to make decisions with clearer return forecast.
According to Shell Nigeria Gas (SNG) the growth in domestic gas production and investment is as a result of such reforms that introduced clearer pricing frameworks and reduced policy uncertainty in the sector.
The company stated this at the second business forum of the Association of Local Distributors of Gas held in Abuja, where industry stakeholders discussed ways to improve access to gas and drive industrialisation across the country.
Speaking during a panel session titled Building a Bankable Gas Distribution Ecosystem: Infrastructure, Capital and Market Demand, Managing Director of Shell Nigeria Gas, Ralph Gbobo, said recent reforms had helped strengthen confidence in the domestic gas market.
A statement by the company disclosed that Gbobo, who was represented by the Head of Gas Distribution, Chukwuka Amos-Ejesi, said the introduction of gas-focused policies, particularly the Petroleum Industry Act, marked a significant shift for the industry.
“The introduction of gas-focused policies, notably the Petroleum Industry Act, marked a turning point. By reinforcing the role of gas in Nigeria’s energy and industrial strategy and embedding instruments such as the Network Code, a critical framework that governs the operations of the domestic gas market and ensures transparency and stability, and the Domestic Gas Supply Obligation, which compels gas producers to allocate gas to the domestic market, the PIA significantly reduced policy ambiguity around gas development,” he said.
Gbobo added that pricing and licensing reforms had further improved investor sentiment and encouraged producers to commit to domestic gas projects.
He said, “The introduction of clearer pricing frameworks for gas supply and transportation and a more transparent and competitive licensing regime has also strengthened market confidence. Together, these measures have improved producer confidence, particularly for domestic gas projects, and signalled the government’s strong commitment to gas as a driver of industrial development.”
The Shell executive said the company’s experience in gas distribution demonstrated the importance of aligning demand, supply and infrastructure development to create a sustainable market.
Reflecting on the company’s early investments in gas distribution, he said, “When SNG started in Agbara–Ota over 20 years ago, demand was nowhere near what it is today. The economics were not perfect, but there was a leap of faith anchored on Nigeria’s industrialisation trajectory. That decision has proven right.”
According to him, sustained investments despite initial challenges helped create industrial clusters and attracted long-term capital.
“SNG’s persistence proved that when demand ambition, supply certainty, enabling infrastructure, and commercial clarity come together, even if not perfectly at the start, it creates industrial clusters that can grow and attract long-term capital.
“Sustainability and bankability emerge over time, as utilisation deepens and confidence builds,” he stated.
The forum, themed ‘From Gas Abundance to Gas Access: Reassessing Nigeria’s Gas Distribution Imperatives’, brought together industry leaders and stakeholders to discuss strategies for expanding gas utilisation in Nigeria.
Participants at the panel session emphasised the need for “clear, supportive and credible policy frameworks, especially measures designed to improve the use of gas”.
Shell Nigeria Gas, incorporated in 1998 as a fully Shell-owned gas distribution company, currently serves more than 150 customers across Abia, Bayelsa, Ogun and Rivers states. The company said it had connected two additional firms in Ogun State to its gas distribution network during the first half of the year.