A Technical Screening and Ranking Framework for Virtual Pipeline Selection to Monetize Stranded Gas in the Niger Delta

Abstract Nigeria's Decade of Gas initiative is an economic response to the estimated 57 TCF of unmonetised gas in Nigeria, despite a proven gas reserve of over 209 TCF. This challenge is largely related to infrastructure constraints in the Niger Delta. The cost of developing conventional pipelines in the region is very high, and these operations are associated with a lot of security risks and right-of-way challenges that lead to the continuous flaring of gas. Compressed Natural Gas (CNG) and mini-Liquefied Natural Gas (mini-LNG) virtual pipeline systems present viable alternatives; however, technology selection is often made without a feasible selection method tailored to Nigerian operating conditions. This study creates a practical technical-economic screening framework to choose between CNG and mini-LNG virtual pipelines for monetising stranded gas, related to Nigeria's context at early stages. It considers costs, distance, operating regulations, and security, using Total Annual Cost and Net Present Value analysis. A 12% discount rate and 15-year project life are assumed. The framework is applied to a base-case gas throughput of 5 MMSCFD over transport distances ranging from 50 to 500 km. From the results, CNG emerged as economically superior for short-haul applications, particularly at distances below approximately 200 km and gas rates below 4 MMSCFD, due to its lower capital intensity. The delivered gas cost for CNG is $4.90/MMBtu at 50 km and $6.80/MMBtu for mini-LNG. At 500 km, mini-LNG achieves a cost advantage of $2.9/MMBtu over CNG, making it a preferred option for distances beyond 300 km because it exhibits a flatter cost profile. The economic break-even distance for the base case is identified between an estimate of 190 and 220 km. Cash-flow analysis indicates that the base case result achieves a payback period of approximately 3.8 years for CNG. Reduced availability (65%) shifts the break-even distance to as low as about 160 km. This recommended approach gives marginal field operators and project developers a useful tool for choosing cost-effective virtual pipeline options that will in turn support Nigeria's efforts to tap into its stranded gas assets.