Nigeria Liquefied Natural Gas Limited disclosed on Wednesday that NLNG, the nation’s biggest gas exporter, was currently not fulfilling its gas export obligations to clients, let alone negotiating new long-term gas export contracts.
However, it emphasized that this was mostly a result of the severe level of insecurity surrounding gas pipelines and willful destruction of gas infrastructure, which had destroyed the export of gas.
On May 17, 1989, Nigeria LNG Limited was established as a Limited Liability Company in order to take advantage of the country’s abundant natural gas resources and produce liquefied natural gas and natural gas liquids for export. It is now one of the top 10 exporters of LNG in the world.
The Nigerian National Petroleum Company Limited owns 49% of the independent Incorporated Joint Venture, followed by Shell Gas B.V., 25.6%, TotalEnegies Gaz & Electricité Holdings, 15%, and Eni International N.A. N.V. S.àr.l, 10.4% of it.
The managing director of Nigeria LNG Limited, Dr. Philip Mshelbila, discussed gas exports during the final panel on Wednesday at the ongoing 6th Nigeria International Energy Summit in Abuja. He explained that Nigeria’s gas supply decrease grew worse in the previous two years.
While rival nations like the United States and Qatar were now signing lengthy contracts for gas exports, he claimed that Nigeria was experiencing force majeure since it could not fulfill its obligations to its customers, let alone sign new contracts.
“Let me get specific about exports. We started this decline in gas supply, it really got bad within the last two years in particular. During that time we had COVID and we then had the Ukraine-Russia crisis.
“Demand has soured to levels we have never seen before. Prices last August were at a record never seen before. This was the period we were having the lowest gas supply ever, so we could not be there to play in that market.
“Coming out of that, contracts are now being signed with Qatar and the United States in particular, and a few other countries. LNG contracts are long-term contracts, so the biggest demand markets are locking themselves into 20-year, 15-year contracts,” Mshelbila stated.
He added, “But do you know what our status is? We are under force majeure, meaning we cannot meet our obligations to existing customers, not to talk of being able to sign up new customers or new contracts. That’s where we are!”
On a few measures the nation should take to deal with this, he said Nigeria needed to immediately address the problem of insecurity.
“If we don’t do it, then this becomes one of the paradoxes where we leave the security situation as it is and we start finding our ways around it.
“That has to be fixed, (for) it will immediately unlock at least 30 percent out of the 40 percent gap that we have in NLNG, and also a lot of the gas that should have been coming into the domestic market,” the NLNG boss stated.
Mshelbila stated that if the Decade of Gas policy is carried out as outlined in the paper, it will address issues that may be done in the medium to long term.
He questioned the kind of paradoxes present in Nigeria and urged a direct approach to the country’s issues.
“Sometimes when I talk to my expatriate friends, I say Nigeria is a nation of paradoxes. Some examples, we produce a huge amount of crude and then we import the finished product. And rather than fix the problem fundamentally, and address those refineries, we built the biggest refinery in the world.”
