ABUJA, Nigeria – August 25, 2025 – The Nigerian National Petroleum Company Limited (NNPC Ltd.) has announced the commissioning of a 113-kilometer segment of the Obiafu–Obrikom–Oben (OB3) Gas Pipeline, a critical milestone in Nigeria’s quest to enhance domestic gas supply and drive industrial growth. The 127-kilometer OB3 pipeline, one of the country’s most significant gas infrastructure projects, is designed to connect gas-producing regions in the Niger Delta to consumption hubs across Nigeria, ensuring seamless distribution and bolstering energy security. According to NNPC Ltd.’s July 2025 monthly report, the commissioned segment is already transporting 300 million standard cubic feet of gas per day (mmscf/d), with contributions from producers such as AHL, Platform, Chorus, and Xenergi. The company has also adopted a revised execution strategy to expedite the completion of the River Niger crossing, a key component of the project, while deploying additional subcontractors to accelerate work on the Ajaokuta–Kaduna–Kano (AKK) Gas Pipeline. This report provides a comprehensive analysis of the OB3 pipeline’s commissioning, its role in Nigeria’s energy strategy, the progress of related projects, and the broader implications for economic development and regional energy integration.
The OB3 Gas Pipeline: A Game-Changer for Nigeria’s Energy Sector
The commissioning of the 113-kilometer segment of the OB3 Gas Pipeline marks a significant step forward in Nigeria’s efforts to harness its vast natural gas reserves, estimated at 209 trillion cubic feet, to meet domestic energy needs and drive economic growth. The 127-kilometer pipeline, connecting Obiafu and Obrikom in Rivers State to Oben in Edo State, is designed to strengthen the linkage between gas-producing regions in the Niger Delta and consumption hubs across Nigeria’s East-West gas network. By facilitating the efficient movement of gas from production centers to demand points, the OB3 pipeline addresses a critical bottleneck in Nigeria’s energy infrastructure, where inadequate pipeline networks have historically limited domestic gas utilization.
According to NNPC Ltd.’s July 2025 report, the commissioned segment is already transporting 300 mmscf/d of gas, with AHL contributing 250 mmscf/d and a combined 50 mmscf/d from Platform, Chorus, and Xenergi. This initial capacity demonstrates the pipeline’s potential to significantly boost gas supply to power plants, industries, and households, reducing Nigeria’s reliance on imported energy and mitigating the impact of frequent power outages. The OB3 project is a cornerstone of the Federal Government’s Decade of Gas initiative, launched by President Bola Ahmed Tinubu to position gas as a transition fuel for economic development and energy security by 2030.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized the project’s importance during a recent stakeholder engagement, stating, “The OB3 project is now at an advanced stage, with the River Niger crossing nearing completion. Once fully operational, it will connect the country’s East-West gas network, ensuring efficient movement from production centers to demand points nationwide.” Ekpo’s remarks highlight the government’s commitment to completing critical infrastructure projects to transform Nigeria’s energy landscape.
Strategic Execution and Project Acceleration
NNPC Ltd. has adopted a revised execution strategy to accelerate the completion of the OB3 pipeline, particularly the challenging River Niger crossing, which has been a significant hurdle due to its technical complexity. The crossing requires advanced engineering to ensure the pipeline’s stability and safety under the river’s dynamic conditions. By deploying additional subcontractors and leveraging cutting-edge technology, NNPC Ltd. aims to overcome these challenges and complete the remaining 14 kilometers of the pipeline by early 2026.
The company’s proactive approach extends to the Ajaokuta–Kaduna–Kano (AKK) Gas Pipeline, another flagship project designed to deliver gas to northern Nigeria. The 614-kilometer AKK pipeline, with a capacity of 2.2 billion cubic feet per day, is expected to supply gas to power plants, industries, and compressed natural gas (CNG) stations in Abuja, Kaduna, Kano, and surrounding areas. NNPC Ltd. has mobilized additional subcontractors to expedite construction, addressing delays caused by funding constraints and security challenges in the region.
Ekpo underscored the AKK pipeline’s significance, stating, “The AKK Gas Pipeline remains a critical priority as its completion will transform domestic gas usage, stimulate industrial development, and strengthen regional energy security.” The pipeline is expected to catalyze economic activity in northern Nigeria, where industrial growth has been hampered by unreliable power supply and limited access to gas. By connecting gas-rich regions in the South to demand centers in the North, the AKK pipeline will support industries such as cement, steel, and textiles, creating jobs and boosting economic diversification.
Broader Gas Infrastructure Initiatives
The OB3 and AKK pipelines are part of a broader strategy to expand Nigeria’s gas infrastructure and enhance energy access. NNPC Ltd. is simultaneously advancing gas processing plants, virtual pipeline systems, and distribution networks to increase the availability of liquefied petroleum gas (LPG) and CNG, particularly in remote areas. Virtual pipelines, which involve transporting gas via trucks or modular units, offer a flexible solution for regions not served by physical pipelines, ensuring that even rural communities benefit from Nigeria’s gas resources.
The government is also promoting the adoption of CNG as a cleaner alternative to diesel and petrol, which have seen significant price increases. The NBS reported a 29.72% year-on-year rise in diesel prices to N1,789.45 per litre in July 2025, exacerbating economic pressures for businesses and households. CNG, with its lower cost and environmental benefits, is being rolled out for use in vehicles and industrial applications, supported by the establishment of CNG refueling stations across the country.
Ekpo highlighted these efforts, stating, “We are advancing gas processing plants, virtual pipeline systems, and distribution networks to expand access to LPG and CNG, ensuring energy availability even in remote areas.” These initiatives align with Nigeria’s commitment to reducing carbon emissions and transitioning to cleaner energy sources, as outlined in the Paris Agreement and the country’s Nationally Determined Contributions (NDCs).
Regional and International Energy Integration
Nigeria’s gas strategy extends beyond its borders, with significant efforts to strengthen regional energy integration. The West African Gas Pipeline (WAGP), operational since 2010, continues to supply gas to Benin, Togo, and Ghana, reinforcing Nigeria’s role as a regional energy hub. The WAGP, which has a capacity of 474 mmscf/d, supports power generation and industrial activities in neighboring countries, fostering economic cooperation and energy security in West Africa.
The ambitious Nigeria–Morocco Gas Pipeline (NMGP), spanning over 5,000 kilometers and linking more than a dozen countries along the Atlantic coast, represents a bold step toward continental energy integration. The NMGP, currently in the development phase, aims to supply gas to West African countries and Europe, capitalizing on growing global demand for LNG as a cleaner energy source. Ekpo noted, “The NMGP is steadily advancing, reflecting Nigeria’s commitment to strengthening cross-border energy trade.”
The NMGP’s progress is particularly significant in the context of global energy dynamics. The Russia-Ukraine conflict has disrupted gas supplies to Europe, increasing demand for alternative sources. Nigeria, with its vast gas reserves and strategic location, is well-positioned to meet this demand, potentially boosting foreign exchange earnings and strengthening its geopolitical influence. The project also aligns with the African Union’s Agenda 2063, which emphasizes infrastructure development and regional integration.
Economic and Social Context
The commissioning of the OB3 pipeline segment and the broader gas infrastructure push must be understood within Nigeria’s challenging economic and social context. The NBS reported a headline inflation rate of 21.88% in July 2025, driven by a 22.74% food inflation rate, which has made basic necessities unaffordable for many households. The naira’s 41.4% depreciation in 2024 has increased the cost of imported equipment for gas projects, while the Central Bank of Nigeria’s (CBN) high interest rate policy (26.75% Monetary Policy Rate) has raised borrowing costs, complicating infrastructure financing.
The World Bank estimates that 38.9% of Nigerians live below the poverty line, underscoring the urgency of leveraging gas projects to drive inclusive growth. Nigeria’s electricity generation capacity, below 5,000 megawatts for a population of over 220 million, remains a major barrier to industrialization. Frequent grid collapses, with over 100 recorded since privatization in 2013, have disrupted economic activity and eroded investor confidence. The OB3 and AKK pipelines, by ensuring a reliable gas supply to power plants, could help address these challenges, boosting electricity generation and supporting industries.
Socially, the gas sector’s development has significant implications for job creation and community development. The Niger Delta, where the OB3 pipeline originates, has faced decades of unrest due to environmental degradation and economic marginalization. By creating jobs and supporting local content development, as mandated by the Petroleum Industry Act (PIA) of 2021, these projects could address some of these grievances, fostering stability and inclusive growth.
Challenges and Opportunities
The OB3 and AKK pipelines, while transformative, face significant challenges that must be addressed to ensure their success:
Infrastructure Bottlenecks: The River Niger crossing and other technical challenges have delayed the OB3 pipeline’s completion. Robust project management and advanced engineering solutions are needed to overcome these hurdles.
Security Risks: The Niger Delta’s history of militancy, pipeline vandalism, and oil theft poses a threat to gas infrastructure. Strengthening security measures and engaging local communities are critical to protecting these assets.
Economic Pressures: High inflation, naira depreciation, and rising interest rates increase project costs and deter investment. Innovative financing models, such as public-private partnerships and international loans, are essential to sustain progress.
Environmental Concerns: Gas flaring, a major environmental issue in Nigeria, must be addressed to align projects with climate goals. Investments in flare capture technologies and renewable energy can complement gas initiatives.
Despite these challenges, the pipelines offer significant opportunities. The OB3 pipeline’s 300 mmscf/d capacity, with potential for expansion, could power additional plants and industries, creating thousands of jobs. The AKK pipeline’s completion will unlock northern Nigeria’s industrial potential, supporting sectors like agriculture, manufacturing, and textiles. The NMGP’s progress positions Nigeria as a global energy player, while domestic CNG and LPG initiatives can reduce reliance on expensive fuels, easing economic pressures on households.
Stakeholder Reactions
The commissioning of the OB3 pipeline segment elicited widespread praise from stakeholders. Energy analyst Dr. Chinedu Okeke described it as a “pivotal achievement” for Nigeria’s gas sector, stating, “The OB3 pipeline will transform gas distribution, supporting power generation and industrial growth.” Industry leaders, such as Oando Group CEO Wale Tinubu, welcomed the milestone, noting, “This is a testament to Nigeria’s commitment to leveraging its gas resources for development.”
Government officials expressed optimism about the broader gas strategy. “The OB3 and AKK pipelines are critical to President Tinubu’s Decade of Gas vision,” said Senator Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil). However, local communities in the Niger Delta called for greater inclusion. “We want jobs and infrastructure, not just pipelines passing through our land,” said Ejiro Okonkwo, a community leader in Rivers State.
Environmental groups, such as the Socio-Economic Rights and Accountability Project (SERAP), urged the government to prioritize flare reduction and renewable energy. “Gas projects must align with Nigeria’s climate commitments,” said SERAP’s deputy director, Kolawole Oluwadare. Consumer advocates also highlighted the need for affordable CNG and LPG to ease the burden of rising fuel costs.
Policy Recommendations
To maximize the impact of the OB3 and AKK pipelines and related initiatives, the following recommendations are proposed:
Accelerate Infrastructure Completion: Deploy advanced technologies and additional resources to complete the River Niger crossing and AKK pipeline on schedule.
Enhance Security: Implement robust security measures and community engagement programs to protect gas infrastructure from vandalism and theft.
Promote Local Content: Ensure indigenous companies play a leading role in gas projects, fostering capacity building and economic empowerment.
Address Economic Challenges: Implement policies to curb inflation, stabilize the naira, and provide incentives for gas infrastructure investment.
Align with Climate Goals: Invest in flare capture technologies and renewable energy to complement gas projects, ensuring environmental sustainability.
Conclusion
The commissioning of the 113-kilometer segment of the OB3 Gas Pipeline marks a transformative milestone for Nigeria’s energy sector, enhancing domestic gas supply and supporting industrial growth. With a current capacity of 300 mmscf/d and plans to complete the River Niger crossing, the OB3 pipeline, alongside the AKK pipeline and regional projects like the NMGP, positions Nigeria as a key player in the global energy market. Despite economic and security challenges, these initiatives offer significant opportunities to create jobs, boost electricity generation, and drive inclusive growth. With sustained government support, strategic partnerships, and alignment with climate goals, Nigeria’s gas sector can deliver lasting benefits for its economy and people.
