Nigeria, the largest oil producer in Africa, is looking to increase its domestic gas supplies and exports with the help of foreign investment. The country holds some of the world’s largest gas reserves and is seeking to capitalize on this resource. To this end, the Nigerian National Petroleum Corporation Limited (NNPC) has signed a memorandum of understanding (MoU) with Golar LNG, a Norwegian company, to build a floating liquefied natural gas (LNG) plant in Nigeria.
The MoU was signed by NNPC CEO Mele Kyari and Golar CEO Karl Fredrik Staubo in Abuja, the federal capital of Nigeria. The details of the agreement have not been disclosed, and Golar has not commented on the matter. However, the company has previously expressed interest in setting up a power project in Nigeria that could use one of its vessels to import LNG.
Nigeria has also signed an MoU with Algeria and the Niger Republic to construct the Trans-Saharan Gas Pipeline, a 614km-long natural gas pipeline that will run through northern Nigeria into Niger and Algeria, eventually connecting to Europe. The pipeline was first proposed in the 1970s, but there is no official word on when it will be completed.
The construction of the floating LNG plant and the Trans-Saharan Gas Pipeline are part of Nigeria’s efforts to increase its domestic gas utilization and enhance its gas exports. The country is looking to diversify its economy away from oil and gas exports and towards other sectors such as agriculture and manufacturing.
Nigeria’s gas reserves are estimated to be around 202 trillion cubic feet, making it the ninth-largest gas reserve holder in the world. However, despite its vast resources, Nigeria has struggled to develop its gas sector due to a lack of investment and infrastructure.
The development of the floating LNG plant and the Trans-Saharan Gas Pipeline could help to unlock Nigeria’s gas potential and provide a boost to its economy. The floating LNG plant will allow Nigeria to export LNG to markets that are not connected to pipelines, while the Trans-Saharan Gas Pipeline will provide a new route for gas exports to Europe.
In addition to boosting its gas exports, Nigeria is also looking to increase its domestic gas utilization. The country has launched the National Gas Expansion Program (NGEP) to encourage the use of gas as a cleaner and cheaper alternative to other fossil fuels such as diesel and petrol.
The NGEP aims to increase Nigeria’s domestic gas consumption from around 1.7 billion cubic feet per day (bcfd) to 7 bcfd by 2026. The program includes initiatives such as the conversion of vehicles to run on compressed natural gas (CNG) and the installation of gas-fired power plants.
Nigeria’s gas sector has the potential to provide significant benefits to the country’s economy and its people. However, to realize this potential, Nigeria will need to attract more investment and develop its infrastructure. The MoU with Golar LNG and the construction of the Trans-Saharan Gas Pipeline are positive steps towards achieving this goal.