Nigeria Stopped Our Plan to Construct 1,200km Subsea Gas Pipeline – Dangote Industries.

Government policies have once again been blamed for stifling economic growth in Nigeria, with the recent revelations from Dangote Industries serving as a prime example of how regulatory bottlenecks hinder private investment in the country. The Vice President of Dangote Industries Limited, Devakumar Edwin, has revealed that a government policy forced the company to abandon its plan to construct a 1,200km subsea gas pipeline.

During a discussion hosted by Nairametrics on X (formerly Twitter), Edwin explained that the pipeline was intended to bring 2 billion standard cubic feet (scf) of gas daily from offshore fields to the Nigerian shore. This gas would have been used to fuel local industries, stimulating domestic economic activity rather than merely exporting raw materials.

“Nigeria has a lot of gas which is trapped in the sea because there is no way to bring it to the shore. We wanted to invest in a network of 1,200km of subsea gas pipeline to bring the gas to the shore and our idea was not to export as NLNG because there is absolutely no difference between exporting the crude or the gas because it is raw material which you can produce a range of petrochemical materials from,” he said.

However, Nigeria’s restrictive policies once again thwarted the project. Edwin pointed out two key regulatory hurdles: first, the government’s refusal to allow a single entity to operate across the entire value chain—upstream, midstream, and downstream. Second, an even more stifling policy required that any gas pipeline built by a private investor be handed over to the Nigerian Gas Company (NGC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

“The gas pipeline was supposed to bring in 2 billion scf of gas. We did a one-year study by hiring two ships to identify the route through which we lay the subsea gas pipeline so that the gas can be collected and evacuated. But then, the government’s policy was that there can be one player upstream, midstream and downstream. We were trying to find a solution to that then the government said all gas pipelines once you build it, you’ll had it over to the Nigeria Gas company. So that this how the project was abandoned,” he added.

Analysts have argued that government policies like these have consistently strangled economic growth in Nigeria, deterring investors who could otherwise help unlock the country’s potential. For a country with over 200 trillion cubic feet of natural gas—the largest reserves in Africa—they noted that this backdrop is the reason Nigeria continues to struggle with gas utilization while other nations are racing ahead in the global energy transition.

Energy experts have also noted that Nigeria is left flaring significant amounts of gas because it lacks the infrastructure and private investment needed to process and use this valuable resource.

Thus, many see the Dangote group’s struggles as a highlight of a deeper issue strangling economic growth. While the company’s investment in Nigeria’s energy sector—most notably its refinery and fertilizer plants—has exceeded $23 billion, the failure to develop critical gas infrastructure due to policy hurdles reflects the broader systemic problem of bureaucratic overreach.

Dangote Refinery As An Example

Dangote’s refinery project, which has been touted as a game-changer for Nigeria’s energy independence, is itself embroiled in complications. The refinery, which was expected to reduce the country’s dependency on imported refined petroleum products, faces operational delays due to policy and regulatory inconsistencies, and analysts are already expressing concerns about pricing once the refinery becomes fully operational.

With such challenges facing even the most prominent local investors, the future for foreign investment looks grim. Analysts have voiced concerns that prospective investors watching Dangote’s ordeal will think twice before committing funds to the Nigerian market.

Economist, Kalu Aja noted that no serious investor will come to Nigeria after seeing how even the biggest local players are being choked by policies.

What Lies Ahead for Nigeria’s Gas Sector?

The Nigerian National Petroleum Company Limited (NNPCL) has announced plans to triple the country’s gas reserves from the current 200 trillion cubic feet to 600 trillion cubic feet as part of its broader strategy to reach net-zero emissions by 2060. A South Korean consortium led by Daewoo E&C has also been brought on board to advance gas development projects.

NNPCL’s Group CEO, Mele Kyari, has also highlighted partnerships with international firms, such as a recent $550 million investment deal with French energy giant TotalEnergies to develop gas infrastructure in Rivers State.

But while these plans sound promising,  analyst believe they mean little without the kind of private-sector participation that policy restrictions currently discourage.

At a time when global energy markets are shifting toward cleaner alternatives, Nigeria’s lack of infrastructure for processing its abundant gas reserves is widely seen as a missed opportunity. More troubling, however, is the message this sends to the international investment community.

The current regulatory framework, which demands that private companies hand over infrastructure to the government, has been criticized as a deterrent to capital inflow.