Company says inadequate gas supply and limited processing capacity could see Nigeria’s share of the global LNG market fall from 5% to as low as 2%……
Nigeria Liquefied Natural Gas (NLNG) has raised concerns over Nigeria’s declining influence in the global liquefied natural gas (LNG) market, warning that the country’s market share could shrink significantly unless urgent steps are taken to boost gas supply and expand processing capacity.
Speaking during the NLNG Facts & Figures Presentation in Lagos, the company’s Managing Director and Chief Executive Officer, Adeleye Falade, said Nigeria’s share of the global LNG market has already dropped from six per cent to five per cent, with the risk of falling further if current challenges persist.
According to him, competing gas-producing nations are expanding their infrastructure at a much faster pace, placing Nigeria at a competitive disadvantage despite its vast natural gas reserves.
“Three to four years ago, Nigeria accounted for about six per cent of the global LNG market. Today, that figure has dropped to five per cent, and if we fail to act, it could decline to three per cent or even two per cent,” Falade said.
He stressed that NLNG’s goal is not merely to retain relevance but to strengthen Nigeria’s position in the international LNG market.
Falade noted that Nigeria possesses one of the world’s largest gas resources, with 215.19 trillion cubic feet (TCF) of proven reserves and an estimated 600 TCF of yet-to-be-proven reserves, according to figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Despite this enormous potential, the country’s LNG processing capacity remains limited to 22 million tonnes per annum (MTPA) through NLNG’s six-train facility on Bonny Island.
He contrasted Nigeria’s position with countries such as Australia, which has approximately 120 TCF of proven gas reserves but a liquefaction capacity of about 88 MTPA, while Malaysia also processes more LNG despite having considerably smaller gas reserves.
According to Falade, the disparity highlights Nigeria’s failure to translate its abundant gas resources into export capacity and economic value.
The NLNG boss warned that continued delays in expanding LNG production could cost Nigeria billions of dollars in export earnings, foreign direct investment and future market opportunities.
He noted that while the global transition away from more carbon-intensive fuels continues, natural gas is expected to remain a major component of the global energy mix for decades, creating a limited window for gas-producing countries to maximise their resources.
Beyond electricity generation, Falade said natural gas now plays a critical role in industries such as fertiliser production, petrochemicals, cosmetics manufacturing and transportation through the adoption of Compressed Natural Gas (CNG).
He argued that Nigeria must seize the opportunity to fully commercialise its gas resources before competing producers capture a larger share of the global market.
To strengthen Nigeria’s competitiveness, Falade disclosed that construction of Train 7 is progressing and will increase NLNG’s production capacity by about 35 per cent, raising output from 22 MTPA to 30 MTPA.
He also revealed that the company has begun preliminary work on Trains 8, 9 and 10, describing the projects as being at an early stage but central to NLNG’s long-term expansion strategy.
According to him, increasing production capacity is essential for attracting long-term investment and preserving Nigeria’s position among the world’s leading LNG exporters.
Falade identified inadequate gas supply as one of the biggest obstacles to the company’s expansion plans.
Following the divestment of Shell and Eni from several onshore assets, he said NLNG has increasingly relied on third-party suppliers for feedstock.
Today, between 70 and 75 per cent of the company’s gas supply comes from producers outside the shareholder group.
To improve supply security, NLNG signed Gas Supply Agreements (GSAs) with six independent suppliers last year and is working towards contracting between 110 and 150 per cent of its gas requirements to provide a buffer against potential disruptions.
He explained that guaranteed gas supply remains a key requirement before any final investment decision can be taken on new processing trains.
Falade added that if feedstock challenges persist, the company may eventually consider restructuring its business model, similar to the vertical integration strategy adopted by the Dangote Refinery.
NLNG urged stakeholders to accelerate upstream gas development, pipeline construction and processing infrastructure needed to unlock stranded gas reserves.
Falade said the technical and commercial frameworks for Trains 8, 9 and 10 should be concluded quickly to enable Nigeria capitalise on growing global demand before the opportunity narrows.
He also confirmed that the force majeure declared on NLNG’s Bonny Island facility in October 2022 following severe flooding remains in effect.
According to him, discussions are ongoing to ensure the company exits the force majeure under conditions that guarantee long-term operational stability.
Sending a message to policymakers, investors and industry stakeholders, Falade said Nigeria must move swiftly to unlock its gas potential or risk losing its place in an increasingly competitive global LNG market.
With countries such as Qatar, the United States and Australia expanding production aggressively, he warned that the next few years will be critical in determining whether Nigeria strengthens its position as a leading LNG exporter or surrenders more market share to faster-moving competitors.
