Nigeria has agreed to supply natural gas to Equatorial Guinea at Nigeria's International Energy Summit in Abuja. African energy experts are urging quick implementation of the gas deal amid high demand and supply disruptions caused by Russia's invasion of Ukraine.
This week's signing of a gas deal by Nigeria's minister of state for petroleum, Timipre Sylva, and his Guinean counterpart, Gabriel Lima, is a testament to Africa's untapped gas market.
The deal seeks to supply Nigerian gas to Guinea's processing site in Punta Europa.
Sylva said the deal would allow much of Nigeria's unused gas to access the global market within two years — a timely development, experts said.
Gbenga Komolafe, head of Nigeria's Upstream Petroleum Regulatory Commission, said, "The supply disruptions caused by Russia's invasion of Ukraine resulted in an upward surge of crude oil prices, surpassing $100 per barrel for the first time since 2014. This development offers market potential for Nigeria to key into maximizing its oil and gas assets."
African energy experts at the signing urged officials of both countries to expedite the implementation of the deal.
Komolafe said African countries need to carry out increased exploration and adopt advanced technology to maximize production yields to increase oil and gas reserves.
Nigeria ranks among nine countries with the highest gas reserves in the world. In January, Nigeria's gas reserves rose by 1.4% from the previous year. But the market remains largely untapped and previous attempts by authorities to initiate gas deals fell apart.
Nigerian authorities last week said they were willing to invest more and focus on natural gas exploration.
Simbi Wabote, executive secretary at the Nigerian Content Development and Monitoring Board, said, "It is time for us to synergize as Africa in order to expand that opportunity beyond the shores of Nigeria."
But officials said a lack of prior investments in the energy sector could limit this opportunity for African countries.
"There's a clear demand and supply gap that we're seeing today, and that's why we're seeing the $104 oil prices in the market today," said Mele Kyari, managing director of the Nigerian National Petroleum Commission. "No one has invested significantly in the last 10 years, more so in the last five years, to an extent that we're seeing the effect of what that truly means."
For now, officials and experts will be eager to see how this gas deal changes the status quo.