Asian Bulletin of Energy Economics and Technology

The study examined Nigeria’s natural gas supply in relation to selected similar economies within and outside Africa, aiming to identify the reasons behind the sub-optimal gas production in the country. The research adopts an expository approach, describing and comparing the natural gas sectors of Nigeria, Algeria, Egypt, and Australia. The findings affirm that Nigeria possesses approximately 5,748 km³ (206.5 Tcf) of gas reserves, yet its gas supply does not match its resource endowment, primarily due to inefficiencies in production, as evidenced by the country's high reserve-to-production ratio. Nigeria’s average annual production is estimated at around 1.5 Tcf, representing about 0.73 percent of its reserves annually, with a reserve-to-production ratio of approximately 133 years. In comparison, Algeria has a reserve of 4,502 km³ (159 Tcf) and an average annual production of 3.53 Tcf, resulting in a reserve-to-production ratio of 45 years. Egypt’s reserves amount to 2,200 km³ (78 Tcf), with an annual production of approximately 2.12 Tcf, translating to a reserve-to-production ratio of 36.8 years. Australia holds a gas reserve of 3,228 km³ (114 Tcf) and produces about 5.3 Tcf annually, which corresponds to a reserve-to-production ratio of roughly 21.5 years. Paradoxically, Algeria, Egypt, and Australia, despite having smaller reserves and facing similar political and economic challenges as Nigeria, produce more gas. Natural gas, being a transition fuel, can assist Nigeria in reducing its carbon emissions in line with the Paris Agreement, while also offering other benefits. However, Nigeria may continue to face environmental hazards and air pollution due to neglect in the sector. Addressing production inefficiencies remains crucial for improving the sector’s performance and environmental sustainability.