Nigeria: $20bn Gas Supply Deals Hinge on Pipeline Flow

Nigeria's more than $20 billion gas supply deals could depend on uninterrupted pipeline operations, the Pipeline Infrastructure Nigeria Limited (PINL) has said.

The company made the warning in Yenagoa, Bayelsa State, on Saturday after NNPC Limited secured gas sale and purchase agreements covering 1.29 billion standard cubic feet per day for long-term LNG feed gas.

The deals also cover another 750 million standard cubic feet per day for domestic industrial gas supply, giving the agreements a combined daily volume of more than 2 billion standard cubic feet.

PINL's General Manager, Community and Stakeholders Relations, Dr Akpos Mezeh, said pipeline vandalism, crude oil theft and sabotage could threaten the gains from the investments.

He spoke at the company's stakeholders' engagement forum, where he said the gas agreements offered Nigeria an opportunity to expand its gas economy, support industries and create jobs.

“These projects will stimulate industrial growth, improve energy security, create employment opportunities and support Nigeria’s long-term economic development,” Mezeh stated.

The agreements were secured through strategic partnerships involving major investors, including the Dangote Refinery, and were presented by Mezeh as evidence of renewed confidence in Nigeria's gas sector.

Pipelines carry the supply burden

Mezeh said the investments were coming alongside progress on major gas infrastructure projects needed to support supply.

The Obiafu-Obrikom-Oben Gas Pipeline had reached 98 per cent completion, with final tie-in activities ongoing, he said.

The Ajaokuta-Kaduna-Kano Gas Pipeline had also reached 94 per cent completion, according to the PINL executive.

He also cited the commissioning of the ANOH Gas Processing Plant as another development in Nigeria's domestic gas infrastructure.

Mezeh warned that the economic benefits of these projects could be lost if pipelines are exposed to attacks and other damage.

“For us at PINL, this project carries a very important message: world-class energy infrastructure can only thrive where pipelines are secure, communities are peaceful, and stakeholders work together,” he said.

He appealed to traditional rulers, community leaders, youths and women to work with security agencies and pipeline operators to prevent attacks on pipeline facilities.

Mezeh said people living near pipeline routes often notice suspicious activity before others and can therefore help prevent damage to the facilities.

“Pipeline security remains a shared responsibility,” he stressed.

He disclosed that operations along the Trans Niger Pipeline and Eastern Gas Network corridor were largely uninterrupted during the past month.

He attributed the uninterrupted operations to cooperation among security agencies, contractors and host communities.

Some operational areas still recorded sabotage, attempted vandalism and equipment failures during the period.

Mezeh said prompt intervention led to repairs at affected facilities. He also said suspects linked to some incidents had been arrested, with investigations continuing.

Communities tied to gas expansion

Mezeh said the expansion of Nigeria's gas economy could affect host communities through jobs, business opportunities and improved energy supply.

He appealed to youths in host communities to take advantage of opportunities created by the expanding energy sector and avoid activities that could damage critical infrastructure.

PINL said it would continue youth and women empowerment programmes, skills acquisition, entrepreneurship support and scholarship schemes in its host communities.

The company also announced that its scholarship programme had been approved as an annual intervention for students from host communities for the duration of its contract with the Federal Government.

Mezeh said the decision came after the success of the maiden scholarship programme and would support education and youth development in the host communities.

The company also said its stakeholders' engagement forum would now hold every two months.

The meetings are intended to give stakeholders enough time to implement and monitor decisions reached at previous forums.

Mezeh expressed optimism that continued cooperation among PINL, host communities and security agencies would provide a stable environment for investment in Nigeria's oil and gas sector.

He also warned against pipeline vandalism, crude oil theft and sabotage as Nigeria seeks to turn the new gas agreements into actual supply.