Ethiopia, Nigeria LNG rail corridor brings gas dependency risk

Ethiopia and Nigeria have launched a continent-wide freight LNG rail network designed to move gas across Sub-Saharan Africa and reduce reliance on fuelwood, but some experts say greater long-term gas dependency is a risk.

The Gas-by-Rail Economic Corridor Initiative (GBR-ECI), unveiled in Addis Ababa last month, is a large-scale infrastructure initiative aimed at reshaping Africa’s energy access, industrial capacity and environmental trajectory. It will position rail transport as an alternative to cross-border gas pipelines.

Promoted by Ethiopia’s Ministry of Transport and Logistics in partnership with Nigeria-based Insight Dynamic Resources, the project proposes a 73,500-km rail system spanning 40 countries.

The project is a “virtual pipeline” that would transport densified LNG by rail, as such bypassing the political, security, and engineering hurdles that have historically stalled transnational pipeline projects in Africa.

One of the problems the initiative seeks to address is Africa’s persistent energy deficit while confronting the environmental damage caused by widespread biomass use.

An estimated 90 percent of households in Sub-Saharan Africa still depend on firewood and charcoal for cooking and heating.

The operational demands of the corridor are substantial. Project documents outline requirements for more than 5,100 heavy-haul locomotives, over 80,000 specialised LNG tank units, and approximately 100,000 wagons and coaches.

Siemens Mobility is listed as a technology partner for signalling, monitoring, and network optimisation, with digital systems intended to manage traffic flows, maintenance, and energy distribution across multiple countries.

Nigeria’s involvement reflects its role as Africa’s largest holder of natural gas and a key LNG supplier. Under the corridor model, gas produced in Nigeria and other producing states would be liquefied, densified and transported by rail to inland markets currently beyond the reach of pipelines or coastal import terminals.

Advocates say this flexibility could accelerate gas adoption in landlocked countries and regions affected by insecurity or weak infrastructure.

Connecting rail LNG

Ikechukwu Obialor, an energy researcher at the African Energy Council, told Gas Outlook that a single last-mile distribution system cannot be handpicked at this stage because each participating country has different terrain, infrastructure, population densities, and market realities.

He said he anticipates a hybrid model where several distribution systems, including micro depots, cylinder exchange networks, and PPP-operated community energy hubs, will complement one another.

“Rail-delivered LNG would be offloaded into regional micro depots or mini LNG hubs, from where private distributors can supply households and small businesses using cylinder-swapping models, small tank deliveries, or localised PPP-managed distribution centres.

“Ultimately, each country’s regulators, private distributors, and local businesses will need to align these models to their unique market dynamics and geography to ensure cost-effective and reliable last-mile access,” he said.

Ayodeji Stephen, Lead at HydroGEM Energy Advisory, told Gas Outlook that the Gas-by-Rail Economic Corridor will only succeed as an energy-access solution if LNG delivered by rail is translated into safe, affordable, and practical energy at a household and small-business level. Rail logistics alone do not replace fuelwood; last-mile systems do.

He said three complementary distribution layers are central to this approach: inland LNG hubs and micro-depots, cylinder exchange and pay-as-you-go (PAYG) models; and public–private partnerships for last-mile delivery.

Stephen said while the corridor is private-sector-led, public–private partnerships (PPPs) are essential for equitable last-mile coverage. He said governments could grant concessions on local distribution zones with service obligations for low-income and rural households.

“Co-finance cylinder fleets, micro-depots, and safety infrastructure through partial capital subsidies and risk-sharing. Integrate clean-cooking standards, consumer awareness campaigns, and social tariffs to ensure gas replaces fuelwood rather than becoming an elite fuel,” he added.

Financing approach

Chigozie Nweke-Eze, the CEO of Integrated Africa Power, said they typically rely on support from development finance institutions and loans to finance the project. He told Gas Outlook that what is important is that these loans are concessional.

He also said it’s useful if private investors are involved. “I think it’s also good to bring in private investors here. Private investors are in Africa currently increasing more and more their involvement in private investment,” he said.

He noted that coordinating up to 40 countries to get this done is challenging, but it’s also challenging for Africa to develop such collaborative projects, which are highly important.

“If this is going to be a model that can spare other cross-border projects, that will be great. And this infrastructure project would also open up other kinds of infrastructure beyond energy. We need transnational infrastructures for Africa’s industrial growth and economic development, that is for sure.

“And I know that the challenges are surmounting political and security issues and barriers […] So of course, we could make use of institutions that already exist, like African Development Bank and Africa Union, and they recently formulated Africa Continental Free Trade Agreement Area.”

However, Obialor said reports on the financing structures remain sketchy; he believes that sovereign guarantees can help de-risk the project for investors. He noted that public-private partnerships, such as the build-operate-and-transfer model, can boost private capital’s confidence in investing.

“Existing protocols such as the AFCTA can also be leveraged to manage the commercial aspect of the projects. With regards to security, unlike pipelines, which require continuous territorial control and long-term rights of way, the Gas by Rail model leverages existing rail corridors protected by national rail security systems.

“Cross-border coordination is further strengthened by the project’s digital backbone, developed in partnership with Siemens Mobility, which enables integrated freight tracking and harmonised operational standards across all participating countries.”

Gas dependency concerns

Stephen raised concerns over locking Sub-Saharan Africa into long-term gas dependency rather than renewables. He noted that LNG is a fossil fuel, and the scale of the proposal is large.

“A credible response must acknowledge climate risks while addressing present-day realities. In many Sub-Saharan countries, 80–90% of households rely on firewood and charcoal, with devastating impacts on health, forests, and women’s livelihoods. In this context, gas-by-rail is framed as a transition fuel, rapidly displacing biomass and diesel while renewable grids, storage, and affordability improve, especially in landlocked and fragile states.”

He added that for credibility, participating governments must integrate gas-by-rail into their NDCs and long-term low-emissions strategies.

“In this framing, gas-by-rail is not the end state, but a bridge, one whose value depends on whether it shortens, rather than extends, Africa’s path to a clean energy future,” he added.

Moreover, Obialor noted that it’s important to situate gas within Africa’s development reality. He said using gas today does not mean locking Africa into gas forever.

“The Gas by Rail system is deliberately designed as a flexible and transition-compatible platform. Because it functions as a virtual pipeline, the same rail-based logistics used to transport LNG can, over time, transport green molecules such as green hydrogen or synthetic fuels without requiring expensive new infrastructure.

“Long term dependency ultimately depends on policy and market design. Governments can ensure that LNG operators invest in renewable R&D, integrate hybrid clean energy systems, and commit to timelines for blending or transitioning to greener fuels. This ensures that companies participating in the LNG market also have ‘skin in the game’ in accelerating renewable adoption.

“In that sense, LNG isn’t the end state; it is a bridge. It allows Africa to scale modern energy quickly while building the economic, industrial, and technological base required to support a full transition to renewables,” he ended.

However the argument that gas can serve as a “bridge fuel” for Africa’s transition to renewable energy is increasingly viewed by experts as a “fossil fuel fallacy” that poses severe economic and environmental risks to the continent.

Critics say that new gas investments likely lock in expensive energy, risk creating stranded assets, and hinder the adoption of cheaper, cleaner, locally-sourced renewable energy.

(Writing by Samuel Ajala; editing by Sophie Davies)