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Manufacturers in Nigeria spent about ₦1.34 trillion on alternative energy in 2025 because they could not get reliable pipeline gas, according to Shell Nigeria Gas. The company said this happened even though Nigeria has 215.19 trillion cubic feet of proven-plus-probable gas reserves, with inadequate pipeline infrastructure still limiting industrial users.
Manufacturers in Nigeria spent about ₦1.34 trillion on alternative energy in 2025 as limited access to reliable pipeline gas forced many firms to use costlier power options, Shell Nigeria Gas has said.
The company said the spending reflects a major gap between Nigeria’s large gas resources and the infrastructure available to move that gas to factories. According to Shell, Nigeria has 215.19 trillion cubic feet of proven-plus-probable gas reserves, but inadequate pipeline infrastructure remains a constraint for manufacturers.
To illustrate the cost difference, Shell said electricity generated from pipeline gas stands at an index of 30%, compared with 100% for diesel self-generation. It also put grid electricity combined with diesel backup at 62%, while noting that actual savings depend on viable gas connections and dependable supply.
Shell pointed to ongoing network expansion as part of the response to the problem. It highlighted the Escravos-Lagos Pipeline System II, which it said expands design gas transmission capacity from about 1.1 billion to 2.3 billion standard cubic feet per day.
The company also said it has built more than 150 kilometres of pipeline infrastructure in Nigeria. It currently supplies natural gas to more than 140 manufacturers and delivers about 60 million standard cubic feet per day, which it said is equivalent to 300 megawatts of power.
The figures underline the scale of energy costs being carried by industrial users when reliable gas supply is not available through pipelines. They also show that access, not only resource availability, remains a central issue for factories seeking cheaper and steadier energy.
Why it matters
The disclosure matters because it links a large industrial cost burden directly to energy infrastructure gaps rather than to a lack of gas in the ground. For manufacturers, energy is a core operating expense, so the difference between pipeline gas, diesel self-generation and mixed grid-backup power can affect production costs and competitiveness.
It also highlights a wider policy challenge: Nigeria’s large gas reserves do not automatically translate into lower energy costs for industry unless transmission and delivery systems reach users reliably.
What it means for your money
There is no direct personal finance action for readers in this report. However, higher energy costs for manufacturers can matter indirectly if they feed into the prices of locally made goods and the broader cost of doing business.
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What to watch now is whether gas pipeline expansion improves access for more industrial users beyond those already connected. It will also be important to monitor whether projects such as the Escravos-Lagos Pipeline System II translate into more dependable supply to factories, since Shell said cost advantages depend on viable connections and reliable gas delivery.
Shell’s figures show a sharp contrast in Nigeria’s energy landscape: manufacturers spent about ₦1.34 trillion on alternative energy in 2025 even though the country has vast gas reserves, with pipeline access still the key missing link.
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