A Novel Framework for Optimising Natural Gas Network Expansion Planning Under Demand Uncertainty in Northern Nigeria

The planning of natural gas network expansion into the under-served northern regions of Nigeria is complicated by high demand uncertainty arising from immature market conditions, limited industrial base, and evolving energy policy. Existing deterministic network expansion planning models fail to adequately account for this uncertainty, potentially leading to stranded infrastructure investments or premature capacity constraints. This study develops a novel stochastic optimisation framework for natural gas network expansion planning under demand uncertainty, applied to the northern Nigerian gas supply challenge encompassing the AKK corridor and proposed northern distribution extensions. The framework integrates a scenario tree-based demand uncertainty model, a mixed-integer linear programming (MILP) network investment optimisation model, and a real options analysis module for evaluating staged versus committed investment strategies. The demand uncertainty model is constructed from a combination of bottom-up industrial demand surveys in Kano, Kaduna, and Sokoto states and econometric demand projection models calibrated against comparable market development trajectories in sub-Saharan Africa. The MILP model optimises pipeline diameter, route selection, and compression station sizing decisions to minimise expected total infrastructure cost across demand scenarios, subject to supply pressure, deliverability, and investment budget constraints. The study's original contributions include: a two-stage stochastic MILP formulation for gas network expansion under uncertainty, a novel real options valuation model for modular compressor station capacity expansion, and an uncertainty-robust pipeline sizing guideline for northern Nigerian conditions. Case study results demonstrate that uncertainty-aware planning reduces expected total investment cost by 18 to 24 percent compared to deterministic planning while achieving higher demand satisfaction probabilities. Keywords: gas network expansion, stochastic optimisation, northern Nigeria, real options, demand uncertainty.