In response to the surging global demand for liquefied natural gas (LNG), Kayode Oluwadare, a Regional Energy Partner and Director at Energy Compact, advocates for increased LNG exports from Nigeria to Germany.
Oluwadare emphasizes that the current demand for global LNG volumes is 400 million tons per annum (mtpa) and is projected to reach 700 million tons per annum (mtpa) by 2030.
While the Federal Government recently signed an MoU with Germany’s Riverside LNG for gas supply at 850,000 tons per annum, experts argue that Nigeria should aim higher in LNG exports, citing the need for a more extensive and diversified market approach.
The Riverside LNG project, set to commence shipments in 2026, faces scrutiny from gas analysts who suggest that the scale and scope of the initiative should align with the substantial LNG requirements of various global markets.
Key Points:
1. Global LNG Demand Dynamics:Oluwadare underscores the escalating global demand for LNG, calling for a strategic focus on expanding LNG supply volumes to meet the growing market needs.
2. Nigeria-Germany Gas Supply MoU: The Federal Government’s recent MoU with Riverside LNG aims to supply gas to Germany initially at 850,000 tons per annum, expanding to 1.2 million tons per annum. The project targets the reduction of flared gas in Nigeria by approximately 50 million cubic feet per day.
3. Analyst Critique: An anonymous gas analyst critiques the MoU, expressing concerns about its viability as a significant LNG export project. The analyst suggests that Nigeria, as a leading gas producer in Africa, should pursue more ambitious LNG export initiatives with a broader range of buyers.
4. Private Sector Involvement:The source advocates for increased private sector involvement in Nigeria’s gas sector, emphasizing that the private sector can drive efficiency and attract investment. Regulatory support from the government is deemed crucial to facilitate private sector-driven initiatives in the country.
5. Riverside LNG Insights: Riverside LNG, a special purpose vehicle of GasInvest, specializes in small-scale LNG production. The company, active since November 2021, plans to reach a production capacity of 1,400 tons per day in subsequent phases, catering to domestic, regional, and European markets.
Conclusion:
As Nigeria navigates the evolving landscape of global LNG demand, there is a call for strategic initiatives that align with the scale and diversity of the market. The Riverside LNG project, while representing a step forward, faces scrutiny for its capacity to meet the growing demands of the LNG market, urging the need for a more expansive and ambitious approach in Nigeria’s LNG export endeavors.
