Energy expert urges halt to $27 billion African gas pipeline

Energy expert Dan Kunle has formally urged President Bola Tinubu to suspend further commitments to the proposed $27 billion African Atlantic Gas Pipeline. Mr Kunle argues the project currently lacks sufficient commercial justification and risks becoming a costly national asset with limited economic returns.

In an open letter, Mr Kunle stated Nigeria must prioritize domestic gas utilization over ambitious regional export projects until critical questions regarding supply, financing, and market demand are resolved. His warning follows the unanimous endorsement of the project by ECOWAS member states on July 19, after signing an Intergovernmental Agreement in Sierra Leone.

Mr Kunle criticized the project as potentially another “Memorandum of Misunderstanding,” highlighting the discrepancy between political ambition and economic reality. "The project is now estimated to cost about $27 billion," he noted. "Recent agreements have moved it forward politically, but a project company, investors, and a final investment decision are still required before construction can become a commercial reality."

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The project is now estimated to cost about $27 billion (approx. ₦43.2 trillion). Recent agreements have moved it forward politically, but a project company, investors, and a final investment decision are still required before construction can become a commercial reality.

He raised significant concerns regarding the gas source, pointing out that undeveloped reserves are not equivalent to commercially available gas. He warned that Nigeria struggles to supply its own power plants and industries, questioning the wisdom of prioritizing long-distance export infrastructure while the nation suffers from energy insecurity. The project also faces severe financial, legal, and geopolitical obstacles, as it would traverse or connect more than a dozen West African nations with disparate regulatory systems and political landscapes.

Mr Kunle advocated for converting gas into electricity and industrial products like fertilizers and petrochemicals. "Nigeria has already spent decades exporting crude oil while importing refined petroleum products," he noted. "We must not repeat that error by exporting gas."

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Nigeria has already spent decades exporting crude oil while importing refined petroleum products. We must not repeat that error by exporting gas.