Nigeria’s Gas Exports To Hit 50% As Cooking Gas Price Spikes Harder
Nigeria is to lead other African countries in providing over 50 per cent of Liquefied Natural Gas (LNG) exports to other continents.
The country, which is faced with a supply squeeze on cooking gas products, throttling crude theft, vandalism and general insecurity, had as last week transformed a state-owned oil corporation, the Nigerian National Petroleum Corporation (NNPC), into a private limited liability company, now called the Nigerian National Petroleum Corporation Limited (NNPC Ltd).
In its second-quarter energy outlook on ‘The State of African Energy’, the African Energy Chamber (AEC) stated that over 65 per cent of the African LNG exports, from 2022 through 2025, is expected from Nigeria and Algeria.
Analysis of the report shows that Nigeria’s LNG exports will hit 50 per cent by 2025, rising from 37 per cent, 39 per cent and 46 per cent by 2022, 2023 and 2024 respectively.
It further shows that Algeria, Egypt and Nigeria are expected to account for 80 per cent of the African gas output from 2022 through 2025.
While Nigeria comes behind Algeria and Egypt in gas (including domestic flows and pipeline exports), the country will lead in LNG exports by 59 per cent, the chamber stated.
This is even as Nigeria’s overall 2022 monetised natural gas production, excluding the volumes pumped to the Eleme Petrochemicals Company Limited (EPCL), is estimated at 50 billion cubic meters (BCM).
“The overall 2022 to 2035 split between gas utilised domestically and exported via pipelines versus gas exported to international markets as LNG is 50 – 50. Nigeria leads the LNG producers over the years 2022 – 2025 with over 120 BCM from an overall output of 205 BCM being exported as LNG,” the AEC stated.
Currently, Nigeria is in the process of ramping up capacity at its LNG project from 22 million to 30 million tonnes per annum (TPA) through its Train 7 scheme and debottlenecking.
The AEC’s report indicated the 2030 supply gap to widen to over 120 million metric tonnes per annum (MMTPA) further upside as Russian LNG is at risk and invasion of Ukraine and Europe’s subsequent decision to wean itself off Russian gas dependence.
“Numerous African countries are well-positioned to help plug a looming gas supply void in Europe as governments and companies in the latter continent look to scale back their dependence on Russian supplies following the invasion of Ukraine,” the chamber also stated.
The Managing Director/Chief Executive Officer of Nigeria LNG, Dr Philip Mshelbila, on Tuesday, said the company’s plant is producing at up to 68 per cent of its capacity due to theft of crude oil and vandalism of pipelines, among other problems.
The NLNG is a consortium of NNPC, Eni, TotalEnergies, and Shell with a capacity of 22 million tonnes per year.
According to Mshelbila, theft and vandalism are gradually strangulating Nigeria’s oil and gas sector, he told an energy conference in Abuja.
“We have been producing in the last month at about between 60 to 68 per cent utilisation. In other words, roughly 35 per cent of our capacity is empty. There are many factors, but the biggest one of them is crude oil theft. If we don’t address this, we will not get out of this quagmire that we’re in,” the NLNG boss said.
Nigeria last week reported a $1 billion loss in revenue during the first quarter of this year due to crude oil theft.
According to Shell, the LNG is a clear, colourless and non-toxic liquid which forms when natural gas is cooled to -162ºC (-260ºF), adding that the cooling process shrinks the volume of the gas 600 times, making it easier and safer to store and ship.
LNG is now emerging as a cost-competitive and cleaner transport fuel, especially for shipping and heavy-duty road transport.
Meanwhile, liquefied petroleum gas (LPG), known as cooking gas and a processed facility from the LNG, has almost tripled in price in the last year.
The latest report from the National Bureau of Statistics (NBS), shows that the average price for refilling a 5kg cylinder of cooking gas stood at N3,921.35 in May from N3,800.47 recorded in April, showing an increase of 3.18 per cent month-on-month, and an 89.28 per cent year-on-year from N2071.69 in May.
To a large extent, the figure NBS declared did not mirror the market reality as a 12.5kg cylinder of cooking gas had soared by 177.78 to N10,000 in June this year from N3,600 in the corresponding period of 2021.
The AEC report added that Africa is conservatively forecast to reach peak gas production at 470 BCM by the late 2030s, equivalent to about 75 per cent of the expected amount of gas produced by Russia in 2022 even as 2022 natural gas output from Africa is expected to reach about 260 BCM.
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