Nigeria’s gas ambitions hit wall of price controls, investor risks

Nigeria’s push to build a gas economy will stay stalled unless the government frees up pricing and creates a market where customers reliably pay, according to a senior executive at Neconde Energy Ltd.

Chichi Emenike, acting managing director and gas asset manager at the company, said investors aren’t seeking windfalls. They want reasonable, predictable returns, and without them the capital needed for the government’s “Decade of Gas” agenda won’t arrive.

“No investor is doing Red Cross. No investor is doing charity,” Emenike said at the Association of Energy Correspondents of Nigeria’s Energy Conference 2026. “Everybody doing investment expects to recover principal plus X.”

Speaking on a panel titled “Market Liberalisation: Performance, Public Value & Commercial Opportunities,” she said payback periods lengthen quickly when buyers don’t pay. “If you do your economics and expect payback in 5 years, you should be protected to get it in 5 years plus X,” she said. “If you don’t have a bankable paying market, that 5 years becomes 7 years, then 10 years.”

Infrastructure gap

Emenike said the domestic market isn’t ready to absorb the investment the sector needs. The biggest shortfall is infrastructure. “There are not enough pipelines, and the market is not well-catalogued,” she said.

Producers are turning to compressed natural gas and liquefied natural gas for last-mile delivery, she said. Still, those routes face their own hurdles because much of the country’s gas remains stranded underground.

The economics of getting it out are punishing, Emenike said. Gas production is capital-intensive and priced in dollars at every stage, from drilling deep wells in the Niger Delta to laying pipelines and building plants that separate gas into dry gas, liquefied petroleum gas and condensates.

Price controls

Her sharpest criticism was aimed at government price-setting. Despite those costs, she said, authorities still try to dictate what producers can charge, with no regard for how projects were financed.

“The government doesn’t know where the investor borrowed money from, what the tenure is, whether it’s 5 years or 16 years, or who funded it,” she said. “Everything in gas operations, from drilling to maintenance, is dollar-denominated. There is hardly any input sourced locally.”

That mismatch exposes producers to currency risk and loan-repayment pressure that regulated prices don’t account for, she suggested. Funding, she said, depends on a market with paying customers.

Emenike credited the Petroleum Industry Act and related changes with moving investors in the right direction but said they fall short. “The market still needs to be fully liberalised,” she said. “What has been done so far helps investors start behaving like business people, not like people running away because they are scared.”

Industry view

Her argument reflects a broader view in the industry that bankable projects are the key to unlocking capital. Backers point to transparent contracts, clear offtake frameworks and payment security as the necessary ingredients. They say these would also widen energy access and support Nigeria’s energy transition.

Emenike framed the stakes in economic terms. “Gas is revenue, gas is jobs, gas can guarantee us economic security,” she said, “but that will only happen if we have a paying market.”

The conference drew policymakers, regulators and operators from the oil, gas and power sectors to discuss strategies for the industry’s sustainable growth.

Others on the panel included Tunji Oyebanji, former chairman of the Major Energies Marketers Association of Nigeria; Clement Isong, the association’s chief executive officer; and Emmanuel Omuojine, managing director of Rainoil Ltd. Emeka Ene, chairman of Oida Energy Group, moderated the session.