• Thursday, February 29, 2024
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Exploring Inland Gas Reserves: What is in it for Nigeria?

Nigeria seeks $8.2bn for finance energy transition plan this year


Nigeria’s Energy Transition Plan (ETP) aims to facilitate a clean energy transition by ensuring access to modern and reliable electricity, which is essential for economic development. The core goal of the ETP is the reduction of emissions in five key sectors, including the Power sector, to achieve net zero by 2060. In this plan, the Power sector would utilize natural gas as a transition fuel, supporting the initial expansion of gas generation for baseload capacity to meet the country’s increasing electricity demand. According to a PWC report in 2020 on “Evaluating Nigeria’s Gas Value Chain”, Nigeria has the 9th largest gas reserves globally with about 209.5 trillion cubic feet(tcf) of proven gas reserves. Engr. Frank Edozie, then Chief Executive Officer of Neconde Energy Limited, had in 2019 described Nigeria as a rich gas province with a profitable side business in oil. Based on the vast reserves of this resource, H.E. Muhammadu Buhari GCFR, President of the Federal Republic of Nigeria, at The Nigeria International Petroleum Summit (NIPS) Pre-Summit Conference 2021, declared the 1st of January 2021, to the 31st of December 2030, as “The Decade of Gas” for Nigeria to drive national industrialization with gas as a crucial tool. How can we maximize this abundant natural gas resource to bolster national development?

Natural Gas Formation and Basins

Natural gas is a form of fossil fuel considered to be clean. It is a mixture of carbon-rich gases usually found in reservoirs the in the earth’s subsurface. It is usually found in deposits of oil sands, cracks of rocks, ocean beds, coal deposits, spaces of overlaying rocks, sandstone within shale formations, and sedimentary rocks. An area of the earth’s crust marked by a thick sequence of sedimentary rocks in the earth’s crust is known as a sedimentary basin. In Nigeria, some sedimentary basins are Chad Basin, Dahomey, Sokoto Basin, Benue Trough, Niger Delta Basin, Bida Basin, and Anambra Basin.

Natural gas produced during crude oil production is called wet or associated gas (AG). AG is a mixture of other hydrocarbons, water vapour, nitrogen, carbon dioxide, and hydrogen sulfides. It is challenging to transport, contains impurities, and must be processed to derive its useful products. AG is sometimes seen as an undesirable by-product of oil production and is usually flared, thus contributing to global warming and negatively impacting health and the atmosphere from heavy greenhouse gas emissions. According to World Bank’s Global Gas Flaring Tracker Report 2023, Nigeria is among the top nine countries contributing to gas flaring globally. Reinjecting AG into the well to boost oil production is a more beneficial alternative to flaring gas. Non-Associated Gas (NAG), or dry gas, occurs naturally and can be found in gas or condensate wells with almost no associated crude oil. NAG is, therefore, a cleaner form of fuel, hence its place as a transition fuel for Nigeria’s energy growth pathway to net zero by 2060.

A Highlight of Some Proven Gas Basins

Nigeria’s Inland Basins include Anambra, Benin, Benue Trough, Bida, and Chad. They hold potentially significant hydrocarbon reserves, with gas proven in the first three. In addition, to use in gas-based industries, these gas reserves offer opportunities for exploitation as fuel for power plants with significant benefits for gas supply security, embedded power generation, transmission load balancing, and speed of project realization.

K. Onuoha and C. Dim, in their research, “Prospects and Challenges of Developing Unconventional Petroleum Resources in the Anambra Inland Basin of Nigeria,” noted that the predominance of gas-prone facies in inland basins indicates good prospects for finding unconventional petroleum in Anambra and other Nigerian inland sedimentary basins. The Anambra Basin, located between 6°–7.8°N latitude and 6°40’–7°30’E longitude, covers Abia, Enugu, Imo, Delta, Edo, and Kogi States. According to O. L. Babatunde, in “The main oil source formations of the Anambra Basin, South-eastern Nigeria”, this basin has one of the largest sub-bituminous coal and lignite deposits with reported incidences of shale oil seepages around Lokpanta in South-eastern Nigeria. Its hydrocarbon potential might be comparable to the Niger Delta basins holding an estimated 10 trillion cubic feet of potential natural gas in reserve.

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In 2004, the first serious search for oil in the Anambra basin commenced. It led to Orient Petroleum Resources Plc obtaining an oil prospecting license (OPLs 915 and 916) with authority to construct a private petroleum refinery in the region. A few successfully explored wells in the region are the Igbariam and Ugwuoba gas fields. The OML 155 (OPR); OPL 915 and 916 (Orient); OPL 907 and 917 (GEC) hold more than 10Tcf of Proven reserves and more than 20Tcf of proven probable and possible reserves. Another proven reserve is the Dahomey or Benin Basin, located on the western coast of Nigeria. It covers Nigeria’s Lagos, Ogun, and Ondo states. Also, the Benue trough extends 1000km northeast from the northern boundary of the Niger Delta to Lake Chad. It spans across Bauchi, Gombe, Ebonyi, and Taraba states. Recently, the Kolmani area of Gombe and Bauchi witnessed the discovery of about 500 billion cubic feet of gas.

Prospects and Challenges of Inland Gas Exploration

Expanding gas exploration to inland basins holds enormous prospects for electricity generation in the country. In a research; “Alternative Gas Supply Strategies – Exploiting Inland Basin Gas for Power Generation”, Engr Frank Edozie shared that co-locating power plants with gas production facilities within the inland basins could minimize capital and operating costs of gas supply infrastructure. Furthermore, with the emergence of the state-focused electricity markets, this colocation strategy which can support 30MW-100MW would increase the reliability and security of the supply. Also, multiple energy projects can be actualized within short time frames as completion times could span 1 – 3 years based on the project size.

Several such projects can be developed simultaneously by different developers and investors. It implies that it is easier to finance these projects and realize returns on investments. Also, numerous commercially feasible uses for natural gas include cooking fuel, commercial heating, and vehicles. The Haber process, which creates ammonia to produce fertilizers, utilizes natural gas as feedstock. Gas also has other applications as feedstock in producing chemicals and plastics. Nigeria could move to a production-driven economy and generate thousands of employment opportunities by investing in industries centered around these applications.

However, Inland gas exploration is not without its challenges. Technical challenges such as inaccessible resources or deep formations, may require expensive advanced drilling equipment and techniques. Gas development requires coordination among all the stakeholders to ensure the efficient and effective operation of the value chain (exploration, production, processing, transportation, distribution, marketing, and sales). Also, the commercial viability of the reserve in the area plays a huge role in determining if such exploitation is profitable. Gas exploration could have environmental and social impacts on local ecosystems and communities, including water pollution, noise pollution, and health implications.


During the flag-off of the first crude oil drilling project in northern Nigeria (Kolmani area), HE President Muhammadu Buhari GCFR employed the Nigeria National Petroleum Corporation (NNPC) to re-strategize and expand its oil and gas exploration footprints to the inland basins. Considering this, there is a need for increased collaboration between the government and Oil Prospecting License (OPL) holders to foster exploratory activities in the country. Also, incentives would encourage more investments and the development of inland natural gas reserves, particularly NAG, to boost the domestic power supply in the country. The massive potential of the abundant natural gas resource could be one of the key levers to economic development for the country that we must harness. It is expedient that we tap into this resource’s job creation and industrialization opportunities as we strive towards closing the energy gap and a smooth energy transition.