Nigerian manufacturers spent approximately N1.34 trillion on alternative energy in 2025, according to Shell Nigeria Gas Limited, which has called on the federal government to accelerate domestic gas pipeline development. The company delivered its case at the Manufacturers Energy Security & Energy Efficiency Summit in Lagos, arguing that inadequate pipeline infrastructure blocks industry from tapping Nigeria's 215.19 trillion cubic feet of proven-plus-probable gas reserves.

What did Shell Nigeria Gas tell the government?

SNG (Shell Nigeria Gas, the company's domestic gas distribution subsidiary) presented a paper titled 'Gas for Manufacturing: Closing the Pipeline Infrastructure Gap to Improve Manufacturing Competitiveness'. The firm advised the federal government to speed up pipeline development in line with Nigeria's Decade of Gas initiative, a government programme to position gas as a driver of the economy.

The company identified three priority actions for government: complete and commission trunklines (major long-distance transmission pipelines), streamline permitting processes, and channel eligible financing toward commercially viable infrastructure projects.

How large is the cost gap?

Shell presented an illustrative comparison showing pipeline gas has an electricity cost index of 30 per cent, compared with 100 per cent for diesel-powered self-generation and 62 per cent for grid electricity combined with diesel backup. On that basis, manufacturers using pipeline gas for power would cut energy costs by 70 per cent relative to diesel generation.

The company cautioned that actual savings depend on viable pipeline connections and dependable gas supplies, and that costs vary between industrial locations.

What did the managing director say?

Managing Director of Shell Nigeria Gas, Ralph Gbobo, represented at the summit by Asset Reliability and Integrity Manager Samuel Ojo, framed the gap in continental terms. He said: "Despite Africa's abundant natural gas resources, Europe has more than 10 times the gas transmission pipeline infrastructure per capita."

"Closing this infrastructure gap is essential to improving manufacturers' access to reliable, affordable, and cleaner energy, reducing dependence on liquid fuels, and enabling greater use of natural gas for both electricity generation and industrial processes such as boilers, steam systems and kilns," Gbobo said. "This will enhance industrial competitiveness and support economic growth across Nigeria and Africa."

Which pipeline projects matter?

Shell highlighted three strategic infrastructure developments:

• Obiafu-Obrikom-Oben pipeline — a critical link connecting Nigeria's eastern and western gas networks, enabling more efficient gas transportation across the country.
• Ajaokuta-Kaduna-Kano Pipeline — a strategic project for extending gas access to northern Nigeria and unlocking new industrial and manufacturing demand centres.
• Escravos-Lagos Pipeline System II — expanded the system's design gas transmission capacity from approximately 1.1 billion to 2.3 billion standard cubic feet per day, strengthening supply to existing and future industrial customers.

The company credited government initiatives, including the Decade of Gas programme, the Midstream and Downstream Gas Infrastructure Fund (a state financing vehicle for gas infrastructure), and other gas-sector investment incentives, with catalysing investment in critical infrastructure.

What has SNG built itself?

Shell Nigeria Gas reported that it has built more than 150 kilometres of pipeline infrastructure and currently supplies natural gas to over 140 manufacturers. Its distribution investments support manufacturing and industrial clusters across Ogun, Abia and Rivers States.

The company's gas supply to industry stands at 60 million standard cubic feet per day, equivalent to 300 megawatts of power. SNG explained that its distribution system connects trunkline supplies to factories through pressure reduction and metering facilities, distribution pipelines and factory connections.

What does Shell expect from manufacturers?

Shell urged the Manufacturers Association of Nigeria (MAN) and business owners to aggregate demand across industrial clusters, establish their consumption requirements and equipment readiness, and enter credible offtake agreements (binding purchase commitments) to support infrastructure investment.

A more extensive and reliable gas network would strengthen not only manufacturing competitiveness but also food processing, fertiliser production and cold-chain logistics, the company said. Shell stressed that improving energy security is increasingly a prerequisite for broader economic resilience and national security.