Gas Infrastructure Push Targets Supply Deficit as Nigeria Generation Falls Below 50% Capacity
Major infrastructure investments by Aramco and Nigerian pipeline developers aim to address critical gas supply shortfalls, as thermal power generation operates at 43% of required fuel volumes.
Syntheda's AI mining and energy correspondent covering Africa's extractives sector and energy transitions across resource-rich nations. Specializes in critical minerals, oil & gas, and renewable energy projects. Writes with technical depth for industry professionals.
Gas production and infrastructure expansion projects across Africa and the Middle East are accelerating as energy companies seek to address widening supply-demand gaps, with Nigeria's power crisis highlighting the urgency of pipeline and processing investments.
Saudi Aramco's Tanajib gas processing plant has commenced operations as part of a broader strategy to increase the company's gas production by 80% by 2030, according to Oil & Gas Journal Nigeria. The facility, alongside the Jafurah unconventional shale gas development, represents a multi-billion dollar commitment to expand non-associated gas capacity. Jafurah, one of the world's largest shale gas fields with estimated reserves exceeding 200 trillion cubic feet, is expected to reach plateau production of 2.2 billion standard cubic feet per day by 2036, supporting both domestic demand and potential export markets.
In Nigeria, pipeline infrastructure development is advancing despite acute supply constraints that have crippled power generation nationwide. The Sagamu-Ibadan gas pipeline project has reached 80% completion, according to Premium Times, citing project officials. "The Sagamu-Abeokuta project is aimed at accelerating industrial growth by providing a reliable gas supply to existing manufacturers," the official stated. The pipeline forms part of Nigeria's Obiafu-Obrikom-Oben (OB3) gas network expansion, designed to deliver gas from production hubs in the Niger Delta to industrial and power consumers in the southwest.
The infrastructure push comes as Nigeria's thermal power plants operate under severe fuel constraints. Gas supply to generation facilities has fallen to approximately 700 million standard cubic feet per day (mmscf/d), just 43% of the required 1,629.75 mmscf/d, according to SABC News and Legit.ng. The shortfall has reduced grid capacity and triggered nationwide blackouts, undermining tariff reforms introduced to attract private investment in the power sector. Nigeria's installed generation capacity stands at roughly 12,500 MW, but actual output frequently falls below 4,000 MW due to gas supply disruptions, transmission constraints, and infrastructure vandalism.
The contrasting trajectories of Saudi and Nigerian gas development underscore divergent regulatory and investment frameworks. Aramco's integrated approach combines upstream development at Jafurah with midstream processing at Tanajib and downstream industrial offtake agreements, ensuring coordinated capacity additions across the value chain. Nigeria's fragmented gas sector, by contrast, suffers from underinvestment in gathering infrastructure, pipeline networks, and processing facilities, despite holding Africa's largest proven gas reserves at approximately 209 trillion cubic feet.
Industry analysts note that Nigeria's gas-to-power deficit persists despite the country flaring an estimated 300-400 mmscf/d of associated gas at oil production sites, equivalent to roughly half the current shortfall at thermal plants. Regulatory efforts to monetize flared gas through the Nigerian Gas Flare Commercialization Programme have yielded limited results, with infrastructure gaps and pricing disputes delaying project sanctions.
The completion of the Sagamu-Ibadan pipeline, expected in the second half of 2026, could add 150-200 mmscf/d of delivery capacity to the southwest region, supporting both industrial consumers and power plants. However, the impact on generation will depend on upstream production increases and the resolution of payment disputes between gas suppliers and power generation companies, which owe producers an estimated $1.3 billion in arrears.
Regional gas infrastructure investment is accelerating beyond Nigeria and Saudi Arabia, with Mozambique's Coral South FLNG facility ramping up production and Tanzania advancing the Lake Tanganyika gas-to-power project. These developments reflect growing recognition that gas infrastructure represents a critical enabler for industrialization and energy access across the continent, particularly as countries seek to balance energy security with emissions reduction commitments.
For Nigeria, the immediate challenge remains bridging the gap between pipeline completion and actual gas flow, a transition that will require coordinated policy interventions addressing upstream investment incentives, midstream tariff structures, and downstream payment discipline. Without such coordination, new infrastructure risks replicating the underutilization that characterizes much of Nigeria's existing gas network, where pipelines operate well below design capacity due to systemic constraints across the value chain.