Dangote Industries Limited has announced the cancellation of its ambitious plan to construct a 1,200-kilometer gas pipeline, citing unfavorable government policies as the reason for this decision. The pipeline was intended to transport two billion standard cubic feet (SCF) of gas per day from offshore fields to the Nigerian mainland, helping power industries and drive economic growth.
Speaking at a recent online event, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries, revealed that the plan was scrapped after the Nigerian government expressed an interest in controlling the pipeline. According to Edwin, the company’s intention was to utilize Nigeria’s abundant offshore gas resources to boost local industrial production rather than exporting the gas in raw form, similar to the country’s exports of crude oil.
He stressed the importance of using gas domestically to create petrochemical products, which would have had a more significant economic impact than merely exporting it as raw material.
This development comes as the Nigerian National Petroleum Company Limited (NNPCL) begins lifting petrol from the Dangote Refinery, a crucial step in addressing Nigeria’s fuel supply challenges. The refinery had faced delays in petrol production due to issues with crude oil supply, but these seem to be resolving as the NNPCL ramps up operations.
There are concerns that fuel from the Dangote Refinery could be sold at a higher price than the current market rate, with reports suggesting that the government may consider a subsidy to cushion the cost for consumers. Meanwhile, local oil marketers have raised concerns that Dangote’s pricing strategy could disrupt their businesses, as the refinery has already lowered the price of diesel and aviation fuel, drawing protests from industry stakeholders.
The Dangote Group’s scrapping of the gas pipeline project marks a setback for Nigeria’s efforts to harness its offshore gas reserves for local industry, and raises questions about the government’s approach to energy infrastructure development.
