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Gas is the future for the Nigerian economy, say unions

23 July, 2020Nigerian unions are optimistic that the Ajaokuta-Kaduna-Kano gas pipeline, whose construction is underway, will contribute to the country’s industrialization and economic development efforts.

The Federal Government of Nigeria announced on 30 June that the construction of the 614km gas pipeline had begun.

The National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association (PENGASSAN), both affiliated to IndustriALL Global Union, see the development as an opportunity to create decent jobs and reduce the high levels of unemployment. According to the country’s National Bureau of Statistics, unemployment is over 23 per cent or 21 million unemployed, and underemployment is 20.1 per cent or 18 million. The underemployed are those who work less than 40 hours a week.

The government and the state-owned enterprise, the Nigeria National Petroleum Corporation, said the pipeline will provide gas for power generation and stimulate the creation of new industries in the towns of Kogi, Niger, Kaduna, and Abuja. It is hoped that the new industries will create thousands of local jobs, transfer technology and promote local manufacturing. The pipeline will also benefit existing industries that rely on gas.

The construction is being carried out as part of China’s new Silk Road, where energy investments supported by China’s Belt and Road Initiative (BRI), which Nigeria joined in 2019. Through this initiative, the Bank of China and Sinosure (China Export Credit Agency) will finance the pipeline by $2.8 billion. Chinese construction and engineering companies are contracted, and the Nigerian partner is Oilserve, an oil and gas company.

Nigeria’s current production of 7,000 megawatts falls short of the country’s electricity demands for domestic and industrial use. It is hoped that the pipeline will close the gap by adding 3,600 megawatts to the national grid. Upon completion of the project, 2.2 billion cubic feet per day of gas will be produced according to the government.

The pipeline will join the Trans-Saharan gas pipeline which will export the natural gas to Europe. With Nigeria’s oil reserves expected to last three or four decades, the huge gas deposits allow for economic diversity.

Lumumba Ogbawa, the general secretary of PENGASSAN says:

“We welcome this development. Gas is the future of Nigeria, and developmental efforts like these from the government are appreciated. The 600 km pipeline from Ajaokuta to Kano will run through several communities – creating jobs along the way during the construction phase. This is the diversification of the economy that we have been clamouring for. It is a timely strategic development.”

Diana Junquera Curiel, IndustriALL director for energy says:

“Natural gas will be the main energy source in the transition from fossil fuels to green energies. It has the potential to develop economies and improve the livelihoods of workers and communities through decent jobs. It is also an important source of energy for households and factories. We hope this gas pipeline will meet the expectations.”

Picture: A pipeline being fabricated on Snake Island, Lagos. Photo CC by Alex Aghomi.