Nigeria joins race to meet booming demand for LNG with new plant
London — Nigeria LNG is taking its first step to increase liquefied natural gas output by more than a third, after years contemplating an expansion to keep up with the world’s major producers.
The producer has signed front-end engineering and design contracts for a seventh facility with joint ventures that include Saipem, TechnipFMC and Chiyoda.
Nigeria is joining nations from the US to Australia in increasing output of the fastest growing fossil fuel to help meet rising demand from China to the Middle East. Its latest plan would boost production to 30-million tonnes by 2024 from 22-million tonnes now.
Total, a Nigeria LNG shareholder, said last week the plant expansion was "very important" as the market was "booming again". Qatar, Australia and the US will probably account for 60% of global liquefied natural gas supply by 2023, according to the International Energy Agency. Nigeria, which supplied the world with 7% of the super-chilled fuel in 2017, does not want to miss out.
"Our vision is to be a global player that helps to build a better Nigeria," Nigeria LNG CEO Tony Attah said.
"We are looking forward to the growth. When I am talking about growth, I am talking about Train 7 [project]. We have the support we need, we have the support from the shareholders, from the government, from the board of directors."
Nigeria needed to invest in new production to avoid slipping from fourth position to 10th by 2025 in the ranking of global liquefied natural gas exporters, Attah said. Global liquefied natural gas demand was expected to increase by 72% between 2017 and 2030, Bloomberg New Energy Finance said in March.
"The big growth is coming from China," Anne-Sophie Corbeau, head of gas analysis at BP’s group economics team, said. She said India had "a lot of potential" in terms of demand.
Nigeria supplied 24 countries with liquefied natural gas in 2017, up from 21 in 2016, according to GIIGNL, an industry body for importers.
Nigeria LNG has been working on supply contracts for the new production line since 2007. The company was now renewing them to finalise tenure and terms, Attah said. It was ready to discuss the flexibility that buyers were seeking in pursuit of shorter, competitive and less rigid terms of supply, he said.
Train 7 would cost $6.5bn to build, with another $5bn to be spent on upstream gas supply. Nigeria LNG would go to market to secure financing, Attah said.
Nigeria LNG is a joint venture between Nigerian National Petroleum, Royal Dutch Shell, Total and Eni.