Uche Cecil Izuora
The Nigeria LNG is making frantic progress to close the gap in gas supply which has caused shortages in its targeted production.
Though Nigeria plans to expand its liquefied natural gas (LNG) export capacity, but its main producer, Nigeria LNG (NLNG), is already being held back by a shortage of gas.
The company is operating below capacity because it is not receiving enough supply, Managing Director Adeleye Falade said September 15 on the sidelines of the Gastech conference in Bangkok.
The NLNG currently operates six liquefaction trains, with utilization rates of between 82 per cent and 83 per cent and the company also remains under the force majeure declared in 2022 after widespread flooding disrupted its gas supply.
However it plans to lift the measure once its utilization rate reaches 90 per cent.
The shortage comes as NLNG moves ahead with an expansion of its liquefaction capacity.
The consortium aims to bring its seventh liquefaction train into service by the end of 2027.
The $10 billion investment is expected to increase the capacity of the Bonny Island plant from 22 million to 30 million tons per year.
The Train 7 project has faced repeated delays, including setbacks linked to the COVID-19 pandemic and the war in Ukraine.
To reach the new capacity, NLNG must first secure more gas. Falade estimates the remaining supply gap at about 15 per cent.
“We still have a delta of about 15 per that we need to close,” Falade said. “Operationally, we are able to do that, but our biggest constraint is gas supply, and we’re working with all the relevant people, including the government, to be able to get more gas to flow into the plant.”
Meanwhile, disruptions in the global LNG market are creating opportunities for suppliers that can provide reliable volumes.
Interest in additional LNG and spot cargoes has increased after exports through the Strait of Hormuz were curtailed amid the war involving Iran. “People are looking at more diversified, reliable sources of supply,” Falade said.
The NLNG, however, is prioritizing its existing commitments.
The company is seeking to meet contractual obligations to customers affected by the force majeure while producing as much LNG as its current gas supply allows. “Our priority currently is to continue to make sure that we fulfil our obligations to our existing customers and maximize as much production opportunity as possible that we have,” Falade said.