The economic potential of natural gas in Nigeria

Abstract

Nigeria is blessed with a huge reserve of natural gas. Currently, Nigerian natural gas reserve is estimated at 185 trillion cubic feet (Tcf). Until recently, most of the gases produced in the course of crude oil exploration were being flared. The purpose of this dissertation was to investigate the potential value of the natural gas on the economy of Nigeria. The economic growth model developed was base on an estimate of the potential gas production and exploration. GDP and per capita GDP were the economic indicators used for the model. Nigerian natural gas availability, competitiveness as well as available gas market were also evaluated. For the period of 6 years (1999 to 2005), total natural gas utilization would have accounted for an estimate of 0.577% and 0.558% annual growth rate of Nigerian GDP and per capita GDP respectively. The evaluation of natural gas contribution to the Nigerian economy for the next 30years (2005 to 2035) using proportional growth rate and learning curve predicted that Nigerian GDP and per capita GDP growth rate would increase as a result of total gas utilization. This research work concluded that Nigeria will be a major supplier of natural gas in future, having USA, Germany, Italy and Ukraine as predictable major gas market. More so, GDP, GDP per capita and economic growth would improve as a result of natural gas utilization. The economic potential of natural gas in Nigeria can significantly improve the standard of living of Nigerians. Hence, the government should put in more effort to stop the flaring of natural gas and utilize it.