Economic and Technical Feasibility of Hydrogen Production from Stranded Natural Gas for Power Generation in the Niger Delta

This study analyses the economic and technical feasibility of producing hydrogen from stranded and flared natural gas in the Niger Delta for use in power generation, contributing to both Nigeria's gas flare elimination targets and its emerging hydrogen energy strategy. The Niger Delta flares approximately 178 billion cubic feet of natural gas annually, representing a significant wasted energy resource and a major source of greenhouse gas emissions. Steam methane reforming of stranded natural gas offers a near-term pathway to hydrogen production at volumes sufficient to fuel hydrogen-ready gas turbines or fuel cell systems, complementing Nigeria's long-term ambition to leverage its hydrocarbon resources in a hydrogen economy. The study conducts a process design and energy balance analysis for an SMR plant sized for a dedicated 50MW hydrogen-fuelled power generation facility at a representative Niger Delta stranded gas location in Bayelsa State. Economic modelling compares the levelised cost of electricity from hydrogen power generation against conventional combined cycle gas turbine generation and solar PV alternatives for the same site. Environmental benefit quantification estimates CO2 equivalent emission reductions from gas flare elimination relative to the SMR process emissions. Results indicate that hydrogen production via SMR from stranded gas achieves a competitive LCOE of approximately 65 USD per MWh under current natural gas price assumptions, representing a viable pathway contingent on carbon credit monetisation from flare elimination. Regulatory analysis identifies gaps in Nigeria's current gas utilisation policy framework that must be addressed to enable this pathway. Keywords: hydrogen production, steam methane reforming, stranded gas, Niger Delta, power generation.