Nigeria’s ambition to increase its global production share of liquefied natural gas (LNG) over the next 15 to 20 years is being slowed down as vital projects continue to experience delay.
The Nigeria LNG Limited (NLNG) is planning to expand plant capacity by 40 percent by building a new production line at a cost of around $15 billion.
The company plans to refurbish existing plants, with investment in new ships, as it seeks to produce around 40 million tons of LNG each year.
Six ships being built by Samsung Corporation and Hyundai of South Korea for the company will increase the number of ships in its fleet to 30.
“NLNG intends to consolidate its position as one of the largest producers and exporters of LNG in the world, maintaining its position as a major and strategic supplier. Currently, NLNG delivers some eight percent of the world’s LNG supply,” the company had said in its ‘Facts and Figures on NLNG 2013’.
Nigeria’s estimated LNG production capacity, currently 22 million metric tons per annum (mtpa) is expected to ramp up when a seventh train comes on stream. The train 7, which is still awaiting final investment decision (FID) by the stakeholders, is expected to lift the total production capacity to 30mtpa.
Also, the FID for the 10mtpa-capacity Brass LNG project which was expected to be taken in the second quarter of 2013, according to NLNG, did not materialise.
Already, the shale gas boom in the United States has impacted on the nation as imports from the US have dropped significantly.
NLNG has long-term supply contracts with buyers in Italy, Spain, Turkey, Portugal and France and also sells on the spot market to buyers in Japan, South Korea, among others.
Nigeria, Africa’s top oil producer and world’s fifth biggest LNG exporter, has continued to see increased demand of spot cargoes from Asian buyers in recent times. Asian buyers typically import spot cargoes from December to March to meet peak heating and power demand.
In late December, Japan, the world’s largest buyer ofLNG, received a spot cargo from Nigeria, according to ship-tracking data. The LNG Pioneer, with a capacity of about 138,000 cubic meters, docked at the Osaka Gas Co.-owned Senboku terminal in central Japan, transmissions captured by IHS Fairplay on Bloomberg show.
In what analysts say will affect Nigeria’s exports to Asia, the top destination for LNG, North American LNG imports are increasingly being seen as a cheaper alternative by Asian buyers.
Japan will intensify efforts to cut its laden fossil fuels cost through importing LNG from North America as well as promoting use of economically efficient coal-fired power generation, Toshimitsu Motegi, minister of economy, trade and industry said in his New Year address issued Wednesday