4 December 2012

Nigeria: Angola, Others Leverage On Nigeria's Static Gas Development

Angola, Australia and other emerging producers of Liquefied Natural Gas (LNG) in the global market are set to benefit from Nigeria's inability to move existing projects in the sector forward, oil and gas operators have said.

While analysing the status of LNG projects in the country such as the Brass LNG, OKLNG and NLNG Train 7, these experts at the just- concluded 2012 edition of the Nigerian Gas Association (NGA) annual conference in Abuja stated that with existing LNG projects that had seen their Final Investment Decisions (FIDs) taken, both Angola and Australia are set to lock in existing LNG markets to the detriment of Nigeria.

The experts warned that irrespective of belief that the market prospects for OKLNG in the Asian region was still within its competitive reach, such continuous delay in progress of the projects which had faced serious difficulties in the recent past was not in the interest of Nigeria's LNG development.

They added that the United States, one of Nigeria's export markets, was expected to completely stay off importation of LNG by 2030.

The 2011 world LNG report of the International Gas Union stated that global liquefaction capacity stood at 278.7 million tonnes per annum (MTPA) from 96 trains in 18 countries as at the end of 2011.

It explained that two more liquefaction projects, which would add to this number and further stretch the market are expected on-stream in 2012. They include the 4.3 MTPA Pluto LNG in Australia as well as the 5.2 MTPA Angola LNG T1 in Angola.

The report noted that the Angolan project, which is the country's first, would bring the number of countries with liquefaction capacity to 19, adding that beyond Australia, a number of new large-scale projects were proposed in 2011 that are expected to add significantly to global liquefaction capacity, including LNG projects in the United States, Western Canada and Mozambique.

Expressing its doubt on Nigeria's readiness to lock on existing and emerging LNG markets around the globe, the report said: "Although 28.3 MTPA of liquefaction capacity had been proposed in Nigeria, none of the partners in those projects have taken a final investment decision and have not announced plans to move most of these projects forward in the near term; Brass LNG is the one exception that appears to be moving forward, however slowly."

These operators at the conference also stated that with about $8 billion in annual earning per year, the proposed Train 7 of NLNG is expected to contribute between $2-3 billion to the company's profit margin if it comes on board.

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