Nigeria’s efforts to convert its vast natural gas reserves into reliable electricity are gathering momentum as federal and state governments, alongside private investors, advance a new wave of gas-fired power projects aimed at easing chronic electricity shortages and supporting industrial growth.
The latest investments reflect renewed confidence in the country’s long-standing gas monetisation strategy, which seeks to use Nigeria’s abundant gas resources to stimulate economic activity, improve energy security and reduce dependence on expensive diesel generators. However, analysts caution that the success of these projects will ultimately depend on broader reforms to Nigeria’s electricity market.
One of the flagship projects is the 60-megawatt (MW) Independent Power Plant (IPP) in Yenagoa, Bayelsa State, commissioned by President Bola Tinubu on April 10, 2026. Developed through the Nigerian Exploration and Production Limited (NEPL)-Oando Joint Venture, the plant is designed to supply electricity to homes, businesses and public institutions. Oando is expected to supply about 11.2 million standard cubic feet of natural gas daily under a long-term agreement, creating a stable commercial outlet for domestic gas production.
In Lagos, Odu’a Investment Company Limited and Elektron Energy Development Strategies are jointly developing a 50MW gas-fired power plant at the Ogba Industrial Estate. The project, estimated at about $40 million, is intended to provide dedicated electricity to industrial and commercial customers, reducing manufacturers’ dependence on Nigeria’s unstable national grid and lowering operating costs.
Nasarawa State is also expanding its energy ambitions after Tetracore Energy Group secured licences to develop a 60MW gas-fired power plant, with plans to scale capacity to between 120MW and 150MW. The project is expected to support industrial clusters and attract new investments into the state.
At the national level, the Nigerian National Petroleum Company (NNPC) Limited continues to position natural gas as the cornerstone of Nigeria’s energy transition. Central to that strategy is the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline, a major infrastructure project designed to expand gas supply to industries and power plants across northern Nigeria. NNPC has projected that its broader gas development programme could attract more than $60 billion in investments by 2030.
Despite the growing pipeline of investments, Nigeria’s electricity sector continues to face structural constraints. While the country has an installed generation capacity of more than 13,000MW, actual power delivered to the national grid typically averages between 4,000MW and 5,500MW, reflecting persistent challenges including inadequate gas supply, ageing transmission infrastructure, weak distribution networks and liquidity shortfalls across the electricity value chain.
The Bayelsa IPP also underscores the gap between project commissioning and commercial operation, as additional technical and safety work was required before electricity could be supplied to end users.
Energy experts argue that integrated gas-to-power projects, combining gas production, electricity generation and dedicated distribution, can significantly improve power reliability for industrial clusters. However, they warn that nationwide gains will remain limited unless policymakers address domestic gas pricing, strengthen the financial viability of the electricity market, modernise transmission infrastructure and improve payment discipline across the sector.
Without these reforms, Nigeria’s abundant gas resources may continue attracting investment while millions of households and businesses remain without reliable and affordable electricity.
