•Says pricing remains major barrier to gas growth in Nigeria
…Urges govt to fund strategic pipelines to unlock stranded gas
Despite Nigeria’s vast natural gas reserves and years of policy reforms aimed at transforming the sector into a driver of industrial growth, the country’s much-anticipated gas boom has remained largely out of reach. While the Petroleum Industry Act, PIA, and the Federal Government’s Decade of Gas initiative have provided a stronger legal and policy foundation, concerns persist over slow implementation, weak infrastructure, pricing distortions, and limited investment inflows.
In this interview on the sidelines of the Nigerian Gas Association, NGA, Legal Forum 2026 in Lagos, Group Head, Legal and Company Secretary of Oilserv Group, Humphrey Onyeukwu, examines why Nigeria has yet to fully unlock the promise of its gas wealth. He argues that although the legal framework has matured, unresolved pricing challenges continue to discourage investment, while inadequate support for critical pipeline infrastructure is leaving significant gas resources stranded. He also urges the government to take a more active role in funding strategic gas projects to deepen domestic supply and accelerate growth. Excerpts:
How do you describe the industry?
So far, from where we sit as an operator, we appreciate that a lot of progress or movement has been made for the gas sector development. However, a lot more is required to ensure that some of those constraints that affect the business, in terms of distribution rates and the like, are given more attention.
So, the government is currently pursuing the decade of gas. Do you think the appropriate legal framework is in place to ensure its success?
Yes. Well, it is the heart of the business, I mean OilServ has, I would say, 80% of the infrastructure blueprint under the gas market plan, which is part of the decade of gas, and is also pursuing more or less to expand the gas infrastructure to ensure the commercialisation of our domestic gas market. For now, in the heart of it, we are involved in a lot of the projects, like that of the Ano project, which is about taking gas from the East and injecting it into the OB3. We are involved in the OB2 project, the AKK as well. So, we are involved in quite a lot of projects that are all part of the decade of gas.
So, yes, the gas initiative is very great, more so that Nigeria has made gas its traditional energy. However, what I would say is that it will require a bit more implementation to also build some level of liquidity that requires satisfying the gas initiatives. So, the government is doing very well, and supporting those projects is a good intention from the government. The businesses, people like us, are also bringing our expertise, capacity, and also supporting the government to achieve the actualisation of some of the decade of gas initiatives. But the bigger picture we want to see in the market is a system that encourages more investment. So, more, what would I call it, market reality pricing, because without that, a lot of these projects may not reach their peak or capacity. So, we are quite pleased with what we are seeing, and we also encourage the government to do more.
Order than execution, what are the challenges you think we should be addressing?
Pricing will be the next. The level of pricing that matches the investment may not meet the level of pricing that the offtakers are willing to take. So, that kind of disconnect sort of tries to stunt the impact of the ‘decade of gas initiatives’, because there ought to be more projects, more pipelines that ought to be built, more gas processing facilities, because Nigeria is more or less a gas province.
We have a lot of gas, and it is about domesticating that gas to serve our local needs. But the gas pricing does not require some level of expertise. If I have a choice between selling gas domestically or taking it abroad, and I realize more value to be gotten from selling outside, i believe we know the obvious. I strongly believe that if we solve that pricing issue, then a lot more positive investment will happen.
So, that is where I believe an effort is required to help us achieve the kind of gains we can expect from the degree of gas initiative.
To what extent are current legal status guiding the industry, from access to funds, because that has been the issue in the industry?
Yeah, the legal framework has a much larger role to play. Much thanks to the Petroleum Industry Act, PIA, which has done a lot of work in bringing some level of certainty around our legal framework. So, that part has helped, but also remember that the rules of money, as money follows where the value is. If the market exists in terms of returns, then will there be more funding unlocked? However, the issue for me is not the legal framework. The legal framework has matured in the sense that we know. What are the laws, what are the regulations, and they have also led to a path of development that we have seen in the gas industry. Beyond the legal framework is what we will call growth materiality; we can do what is best for the industry’s growth. Moreso, that is what we can unlock. If we have clarity, which stipulates that if I put in this, I will be able to recover my fund as well as some profit, then I think more funding will be unlocked. That is an area that I believe may be the next event of our initiative today, around how to go about the market.
What is your advice to the government for further growth expected in the industry?
Government is a key factor in the development process of the industry. My advice to the government is that they should also do more in terms of funding some of these major infrastructure projects, particularly pipeline infrastructure, which may not be able to attract international funding that will help make it happen. Of course, there is a bit of uncertainty around the commercials because, as I mentioned, the prices are new. So, if those are not, we won’t be able to attract that level of funding needed. Yes, we need government; we also need partners, as well as support. Because, yes, the market has increased. There is an opportunity for further step-ups or to take step-ups in moving the infrastructure.
However, that cannot happen because of the disconnected materiality and the presence of the CISO. My advice to the government is that it has to play a role in actively ensuring new infrastructural development and creating an enabling environment for businesses to thrive. We have the North-South Gas Pipeline, which is a key pipeline project that will also help address and unlock alot of gas in the East, which has somehow been stranded. So, as the government supports the pipeline, that will be an added benefit to the sector. That will also put more gas in the market.
But what is the essence of deregulation, if the government is still pumping in money?
No, the pricing cannot attract the level of prospects that we have. It is not the investment in those big projects. So, that is why I say it is also a commonwealth and a win-win process.
How do you see the conference and the issues being looked at?
It was an excellent discussion. The topics, the sections, the participation. We learnt a lot and also met a lot of my colleagues in other spaces. So, it was a good one, and I am looking forward to more of it in the future.
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