• Friday, September 29, 2023
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Nigeria’s LNG export drops 15% in 2022, worst decline in Africa

Nigeria’s LNG export drops 15% in 2022, worst decline in Africa

Liquefied natural gas from Africa’s largest oil and gas producer fell by 15 percent the most on the continent, last year, according to a new report by the Paris-based energy think tank, the International Energy Agency (IEA).

In their Gas Market Report, Q1–2023, which includes gas market highlights for 2022, they noted that the biggest export declines occurred in Nigeria, Algeria, and Angola. However, LNG exports from Egypt increased by 10 percent, albeit at a much slower pace than last year when the previously idled Damietta LNG terminal was brought back into service.

Algeria and Angola’s supply dropped by 13 percent and nine percent respectively. In addition, the International Energy Agency (IEA) said that Africa is the only continent that recorded low LNG production and supply.

According to the IEA, Africa was the only exporting region where production decreased in 2022 by six percent.

Globally, LNG supply growth was relatively modest in 2022 at 5.5 percent, despite an unprecedented rise in LNG demand in Europe following the gradual decline in Russian pipeline gas deliveries throughout the year.

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The utilisation rate of global liquefaction capacity averaged 84 percent in 2022, unchanged from 2021 levels and slightly above the 2017- 2021 average of 83 percent.

However, the rate in the second half of 2022 was markedly lower than during the first half of 2022.

“This mid-year decline was due to a number of unplanned supply disruptions (led by the extended outage at Freeport) as well as technical issues and upstream underperformance at legacy plants, particularly in Algeria, Nigeria, Malaysia and Australia,” IEA said.

Despite the generally favourable market conditions, the long-anticipated wave of final investment decisions (FIDs) on LNG liquefaction projects did not fully materialise in 2022, with only two large-scale plants in the United States (Plaquemines and Corpus Christi Stage 3) and one small-scale floating LNG (FLNG) project in Malaysia (ZLNG Sabah) getting final approval.

The Agency said that the slow FID activity was due in part to rising construction costs and widespread engineering, procurement and construction (EPC) contract renegotiations throughout the year.

“However, many pre-FID projects made significant progress towards an eventual FID in 2022, leaving the door open to a strong year in 2023,” the Agency said.