Nigeria earned N2.8 trillion from exporting Liquefied Natural Gas (LNG) last year, the highest in six years, on the back of the Russia-Ukraine war, which raised natural gas prices, experts say.
Data from the National Bureau of Statistics (NBS) has shown that Nigeria’s LNG sales jumped by 100 percent from N1.4 trillion in 2020 to N2.8 trillion last year.
Gas exported from Nigeria is sold as Liquified Natural Gas through the Nigeria LNG company’s long-term contracts with countries in Europe and Asia, including Portugal.
It is also used domestically for power generation, as feedstock for gas-based industries such as petrochemicals and fertiliser production, industrial heating, and as fuel for natural gas vehicles.
Oil and gas analysts have pinned the increase in natural gas sales on the Russia/Ukraine war, which spiked demand for Nigerian gas from Europe.
Olufola Wusu, partner and head of oil and gas at Megathos Law Practice, said that the shift to renewable energy and the Russia-Ukraine war led to the rise in LNG prices globally.
He said, “The hasty switch to renewables triggered an energy crisis (evidenced by rising European electricity prices). This crisis was made worse by the Russian Invasion of Ukraine, leading to a rise in LNG prices.
“LNG prices may remain steady or even rise, due to Europe’s urgent switch to LNG as it tries to pivot from Russian natural gas supply quickly.”
According to Wusu, Europe’s sudden pivot to LNG altered global LNG trade in 2022. European LNG imports rose by 60 percent to replace Russian gas, while lower Chinese LNG imports helped balance the global LNG market.
Natural gas is Africa’s best long-term energy supply alternative for alleviating energy poverty and improving quality of life, particularly in Sub-Saharan Africa. Natural gas, as a fuel for sustainable development, can provide African nations with accessibility, affordability, and dependability.
Chinedu Onyegbula, an energy sector specialist and director at Bullox Resources Limited, said the increase in natural gas sales can be attributed to increased gas demand caused by the Russia/Ukraine issue.
“Gas sales are dominated by the dollar and are influenced by market conditions. Any increase in gas prices is due to global demand, realities, or the exchange rate affects the revenue forecasts,” he said.
“Another factor is increasing output from our gas facilities to accommodate that demand.”
According to Onyegbula, Nigeria’s gas remains in high domestic and international demand.
He said, “Some captive gas power plants are coming on stream, as well as grid-connected power plants utilising more gas as their maintenance is being finalised and allowing more gas to be supplied.
“So, the biggest factor that could be influencing this increase would be greater demand domestically and internationally, dollar fluctuations, and increased supply being generated for the market.”
According to NBS, Nigeria earned N2.8 trillion in 2022, N1.9 trillion in 2021, N1.4 trillion in 2020, N1.7 trillion in 2019, N1.8 trillion in 2018 and N1.5 trillion in 2017.
African Energy Chamber said Nigeria, Algeria, and Egypt are on the course to account for about 80 percent of Africa’s natural gas production from 2022 to 2025.
It said, “Nigeria and Algeria are expected to contribute to over 65 percent of the liquefied natural gas (LNG) exports from Africa to international markets.
“In addition, 50 percent of the 2022-2025 cumulative gas flows from the top 10 producers in Africa are expected to be exported as LNG to international exports.”
In June last year, Mele Kyari, group chief executive officer of Nigerian National Petroleum Company Limited, said Nigeria earned over $1 billion from Portugal by selling natural gas in 2022 alone.
Kyari said there are ample opportunities to grow the energy supply to Portugal, saying Nigeria has invested in critical infrastructure to ensure domestic gas availability and increase gas supply to the international market.
The Nigerian government has indicated that it is turning its focus on gas with the declaration of a ‘Decade of gas,’ backed by new policy actions, including drafting a gas expansion plan to use more gas domestically, but its inability to liberalise pricing has stalled investors’ plan to build new projects.
The NLNG is expanding its supply with the planned construction of Train 7, which could create over 12,000 jobs and improve growth by 35 percent from 22 to 30 Metric Tonnes Per Annum (MTPA) of LNG.
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Nigeria’s natural gas sales rise highest on Russia-Ukraine war
By Abubakar Ibrahim & Chinedu Ndigwe
Nigeria earned N2.8 trillion from exporting Liquefied Natural Gas (LNG) last year, the highest in six years, on the back of the Russia-Ukraine war, which raised natural gas prices, experts say.
Data from the National Bureau of Statistics (NBS) has shown that Nigeria’s LNG sales jumped by 100 percent from N1.4 trillion in 2020 to N2.8 trillion last year.
Gas exported from Nigeria is sold as Liquified Natural Gas through the Nigeria LNG company’s long-term contracts with countries in Europe and Asia, including Portugal.
It is also used domestically for power generation, as feedstock for gas-based industries such as petrochemicals and fertiliser production, industrial heating, and as fuel for natural gas vehicles.
Oil and gas analysts have pinned the increase in natural gas sales on the Russia/Ukraine war, which spiked demand for Nigerian gas from Europe.
Olufola Wusu, partner and head of oil and gas at Megathos Law Practice, said that the shift to renewable energy and the Russia-Ukraine war led to the rise in LNG prices globally.
He said, “The hasty switch to renewables triggered an energy crisis (evidenced by rising European electricity prices). This crisis was made worse by the Russian Invasion of Ukraine, leading to a rise in LNG prices.
“LNG prices may remain steady or even rise, due to Europe’s urgent switch to LNG as it tries to pivot from Russian natural gas supply quickly.”
According to Wusu, Europe’s sudden pivot to LNG altered global LNG trade in 2022. European LNG imports rose by 60 percent to replace Russian gas, while lower Chinese LNG imports helped balance the global LNG market.
Natural gas is Africa’s best long-term energy supply alternative for alleviating energy poverty and improving quality of life, particularly in Sub-Saharan Africa. Natural gas, as a fuel for sustainable development, can provide African nations with accessibility, affordability, and dependability.
Chinedu Onyegbula, an energy sector specialist and director at Bullox Resources Limited, said the increase in natural gas sales can be attributed to increased gas demand caused by the Russia/Ukraine issue.
“Gas sales are dominated by the dollar and are influenced by market conditions. Any increase in gas prices is due to global demand, realities, or the exchange rate affects the revenue forecasts,” he said.
“Another factor is increasing output from our gas facilities to accommodate that demand.”
According to Onyegbula, Nigeria’s gas remains in high domestic and international demand.
He said, “Some captive gas power plants are coming on stream, as well as grid-connected power plants utilising more gas as their maintenance is being finalised and allowing more gas to be supplied.
“So, the biggest factor that could be influencing this increase would be greater demand domestically and internationally, dollar fluctuations, and increased supply being generated for the market.”
According to NBS, Nigeria earned N2.8 trillion in 2022, N1.9 trillion in 2021, N1.4 trillion in 2020, N1.7 trillion in 2019, N1.8 trillion in 2018 and N1.5 trillion in 2017.
African Energy Chamber said Nigeria, Algeria, and Egypt are on the course to account for about 80 percent of Africa’s natural gas production from 2022 to 2025.
It said, “Nigeria and Algeria are expected to contribute to over 65 percent of the liquefied natural gas (LNG) exports from Africa to international markets.
“In addition, 50 percent of the 2022-2025 cumulative gas flows from the top 10 producers in Africa are expected to be exported as LNG to international exports.”
In June last year, Mele Kyari, group chief executive officer of Nigerian National Petroleum Company Limited, said Nigeria earned over $1 billion from Portugal by selling natural gas in 2022 alone.
Kyari said there are ample opportunities to grow the energy supply to Portugal, saying Nigeria has invested in critical infrastructure to ensure domestic gas availability and increase gas supply to the international market.
The Nigerian government has indicated that it is turning its focus on gas with the declaration of a ‘Decade of gas,’ backed by new policy actions, including drafting a gas expansion plan to use more gas domestically, but its inability to liberalise pricing has stalled investors’ plan to build new projects.
The NLNG is expanding its supply with the planned construction of Train 7, which could create over 12,000 jobs and improve growth by 35 percent from 22 to 30 Metric Tonnes Per Annum (MTPA) of LNG.
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