During a recent conversation on an X (formerly Twitter) space hosted by Nairametrics, Mr. Devakumar Edwin, Vice President of Dangote Industries Limited, shed light on the company’s decision to abandon its plans to construct a 1,200-kilometer subsea gas pipeline.
The pipeline was initially intended to transport gas from offshore sources to the Nigerian mainland, where it would be processed and supplied to local industries and businesses.
Mr. Edwin explained that the project was shelved due to restrictive government policies at the time. One key policy prevented a single entity from operating across the entire gas value chain, which includes upstream, midstream, and downstream sectors. This limitation effectively blocked Dangote Industries from overseeing the entire pipeline project.
Furthermore, another regulatory barrier contributed to the project’s cancellation. According to Mr. Edwin, the government mandated ownership of all gas pipelines in the country, regardless of who funded or built them.
This policy, which restricted private ownership, created additional hurdles for the company, ultimately leading them to reconsider their investment in the subsea gas pipeline.
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“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.”
“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.“
Despite these challenges, Dangote Industries remains committed to exploring other viable opportunities within the energy sector, while navigating the complex regulatory landscape of the Nigerian gas industry.