Energy expert urges commercial review of $27 billion African Atlantic Gas Pipeline

Mr Kunle said Nigeria must prioritise domestic gas utilisation over ambitious regional export projects until critical questions about gas supply, financing and market demand are resolved.

Energy expert Dan Kunle has formally urged President Bola Tinubu to suspend further commitments to the proposed $27 billion (approximately ₦43.2 trillion) African Atlantic Gas Pipeline. Mr Kunle argues that the project currently lacks sufficient commercial justification and risks becoming a costly national asset with limited economic returns.

In an open letter addressed to the President dated 23 July—his third such correspondence within three weeks—Mr Kunle stated that Nigeria must prioritise domestic gas utilisation over ambitious regional export projects until critical questions regarding supply, financing, and market demand are definitively resolved.

His warning follows the unanimous endorsement of the African Atlantic Gas Pipeline project by Economic Community of West African States (ECOWAS) member states on 19 July, after the signing of an Intergovernmental Agreement (IGA) in Lungi, Sierra Leone. The ‘Memorandum of Misunderstanding’

Mr Kunle criticised 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 (approx. ₦43.2 trillion),” Mr Kunle 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.”

He raised significant concerns regarding the source of the gas. While Nigeria boasts over 200 trillion cubic feet of proven reserves, Mr Kunle pointed out that undeveloped reserves in the ground are not equivalent to processed, commercially available gas. He warned that Nigeria continues to struggle to supply power plants and industries domestically, questioning the wisdom of prioritising long-distance export infrastructure while the home front suffers from energy insecurity. Financial and Geopolitical Risks

Mr Kunle further warned that the project faces severe financial, legal, and geopolitical obstacles. Unlike the Trans-Saharan Gas Pipeline, which involves only three countries, the African Atlantic Gas Pipeline would traverse or connect more than a dozen West African nations, each with disparate regulatory systems, fiscal regimes, and political landscapes.

“A pipeline of almost 7,000 kilometres is only as strong as its weakest treaty, weakest jurisdiction, and weakest financial participant,” he wrote. He questioned how participating countries would finance such a massive capital outlay and who would bear the burden if nations fail to meet their obligations. The Call for Industrialisation

The expert advocated for a shift in strategy, arguing that Nigeria would derive greater economic value by converting gas into electricity and industrial products such as fertilisers, petrochemicals, methanol, and steel.

“Nigeria has already spent decades exporting crude oil while importing refined petroleum products,” he noted. “We must not repeat that error by exporting gas as a raw material while importing products that could have been produced with that gas at home.”

He suggested that Liquefied Natural Gas (LNG) offers a more flexible and commercially viable alternative to a fixed transcontinental pipeline, as it allows for redirected cargoes based on market demand. Recommendation to the Presidency

Mr Kunle urged President Tinubu to direct the Presidential Petroleum Reform and Value Optimisation Taskforce, chaired by Mr Fola Adeola, to conduct an independent commercial, financial, and strategic review of the pipeline project.

He insisted that the pipeline should proceed only if it is privately financed, backed by enforceable commercial agreements, and demonstrably offers superior benefits to Nigeria compared with alternative investments.

“The government should first publish an independent national gas plan showing how Nigeria will supply its power stations, industries, and other national obligations over the coming decades,” Mr Kunle concluded. “Only gas that is genuinely surplus, developed, and commercially available should be considered for new long-term exports.”