Forecasting Natural Gas Consumption for Urea Production in Nigeria: A SARIMAX Modeling Approach

Abstract

As Nigeria seeks to diversify its economy and enhance its agricultural and industrial output, understanding and forecasting natural gas consumption in key sectors such as fertiliser production is critical for sustainable crop yields and economic development. However, domestic urea fertiliser production is currently hindered by the inadequate and inconsistent supply of natural gas to urea production plants. This paper presents a forecast of natural gas utilization for urea fertiliser production, using Nigeria’s urea fertiliser industry as a case study. A Seasonal Autoregressive Integrated Moving Average with Exogenous Variables (SARIMAX) model was employed to predict monthly gas demand based on historical data from March 2021 to October 2024. The forecast, covering November 2024 to October 2027, indicates a steady increase in natural gas consumption, with an average monthly growth rate of approximately 0.91%. The total forecasted consumption for the period is 215.76 billion standard cubic feet (BSCF). These findings underscore the need for proactive planning by stakeholders across the urea fertiliser and energy value chains. To ensure production stability, urea fertiliser plants, policymakers, and gas suppliers must prioritize infrastructure expansion, secure long-term gas supply contracts, and invest in predictive analytics. The model demonstrated a satisfactory fit with robust performance metrics, including acceptable RMSE, MAPE, and R² values.