by Ken Etete, Group CEO, Century Group.
Nigeria is one of the world’s biggest LNG exporters. Since the first train at Nigeria LNG was commissioned in 1999, the country has built a massive LNG export complex with a capacity of 22.5 million tonnes per annum (mtpa). Last year, it held a 6% market share of the global LNG export market and was the world’s 6th largest exporter of the commodity.
But while Nigeria’s gas has benefited industrialization and power generation overseas, LNG has remained relatively absent of its domestic market. This is now changing along with the government promotion of gas as a transition fuel and increasing private sector investment into virtual gas pipelines.
At the Century Group, we have always believed that gas was meant to play a bigger role in supporting Nigeria’s industrialisation and energy access. As early as 2011, we set up Gas Plus Synergy (GPS) to support the monetization of associated gas and reduce carbon emissions across the country’s oil & gas sector. In 2021, our efforts paid off with the signing of a Sales & Purchase Agreement with Nigeria LNG for the delivery of LNG to the domestic market.
Moving forward, we will continue to expand Nigeria’s domestic gas value-chain, and are committed to incentivize the switching from diesel to gas across sectors such as manufacturing and transport. This will support new sustainable development models for Nigerian industries, and ultimately make the economy more resilient.
As Nigeria recovers from a recession caused by the Covid-19 pandemic and crash in oil prices, there are several reasons to be bullish on the future of its domestic gas market.
To begin with, the country has increasingly become aware of the potential to develop its 206 Tcf of gas reserves both for the domestic and for the export markets. The 2020-2030 period has been declared “Decade of Gas” and is seeing several incentives to boost gas monetization. Nigeria has also taken a clear stance in favor of gas even as it thrives to reach net 0 emissions by 2060.
Market dynamics are also evolving in a favorable way and will be providing positive grounds to support gas adoption moving forward. Throughout the end of 2021 and first quarter of 2022, fluctuating commodity prices have sent diesel prices soaring, generating significant operational expenses for Nigerian industries that heavily rely on diesel for power generators and logistics. As a result, demand for cheaper and cleaner fuels such as CNG and LNG is growing.
It is now up to Nigerian companies and financiers to step up and meet the needs of the hour.