Investments in natural gas are growing in importance amidst the sustainability debate, as G7 countries have expressed their support for the resource in light of the current energy crisis in the West and potential gas market shortages due to the Russia-Ukraine crisis.
This development is particularly beneficial for Nigeria, one of Africa’s largest natural gas producers with proven reserves of 209.26 trillion cubic feet. The G7’s decision demonstrates a practical approach to energy security and economic stability, acknowledging gas’s significance in addressing global energy needs.
The G7, comprising Canada, France, Germany, Italy, Japan, Britain, and the US, acknowledges the ongoing role of gas in ensuring energy stability during the shift to cleaner alternatives. The G7 highlighted the importance of diversifying energy supplies away from Russian sources and identified investments in liquefied natural gas (LNG) as a potential solution to address gas market challenges resulting from the crisis.
Analysts anticipate that the G7’s support will attract significant investment to Nigeria’s gas sector, stimulating economic growth and job creation. This increased focus on gas could also reduce Nigeria’s reliance on oil, aligning with the government’s ‘Decade of Gas’ initiative. The G7’s backing is expected to unlock substantial investment in natural gas projects across Africa, aimed at supplying gas to Europe and Asia.
This support may lead to increased foreign investment in the region, especially in infrastructure for LNG exports. Nigeria earned $40 billion from gas sales in 2023, with a significant portion going to the government through the Nigerian National Petroleum Company. The country continues to invest in gas pipelines, including projects like the Trans-Saharan Pipeline and the Nigeria-Morocco Gas Pipeline Project, to enhance gas supply to domestic and international markets. The NMGP is poised to supply gas to Morocco, 13 ECOWAS countries, and Europe, creating opportunities for economic development along the pipeline route.
This positive signal is expected to attract more investment in Nigeria’s gas sector, provided there are improvements in the ease of doing business to facilitate such investments. Nigeria’s improved ranking in the World Bank’s ease of doing business index is a step in the right direction, signalling the potential for increased foreign investment in the country’s gas sector and other African gas industries.
