News - Oil & Gas - June 8, 2021

Nigeria LNG seal gas sale, purchase agreements with three firms to boost domestic supply

MEDIATRACNET

To boost the domestic supply of natural gas and promote domestic utilization of the commodity among Nigerians, the Nigeria LNG on Tuesday executed sales and purchase agreements with three gas firms.

The agreements were executed with Asiko Power Limited, Bridport Energy Limited and Gas-Plus Synergy Limited.

The Managing Director/Chief Executive, NLNG, Tony Attah, said the SPAs signed in Abuja would facilitate the project execution and development of infrastructure by gas off-takers to facilitate the delivery of liquefied natural gas (LNG) into the domestic market.

Attah said the exercise is not only the demonstration of another step by the company in support of the Federal Government’s “Decade of Gas” initiative but a testament of how the NLNG continues to live its vision as a global LNG company helping to build a better Nigeria.

Under the agreement, the NLNG announced its commitment to unlocking gas utilization in the country by supplying about 1.1 million tonnes per annum (MTPA) of LNG to Asiko Power Limited, Bridport Energy Limited and Gas-Plus Synergy Limited.

The SPAs, which would be on a delivered ex-ship (DES) basis, would facilitate project execution and development of infrastructure led by off-takers to aid LNG delivery into the domestic market.

Ex-ship delivery contracts provide that the NLNG would deliver the gas to the buying firms at their port of destination for onward distribution to their end-users across the country.

Apart from remaining a major influencer in the domestic LPG sector, Attah said the Nigeria LNG has dedicated about 450,000 tonnes per annum of liquefied petroleum gas (LPG), otherwise called cooking gas, to the domestic market.

He said the focus of the company has been to support the use of cleaner energy to protect Nigerians and the environment from the hazards posed by their use of other cooking fuels, by encouraging the use of cooking gas in Nigeria.

The execution of the SPAs, he said, followed a domestic LNG (DLNG) workshop in November 2019 to stress test the delivery model with industry stakeholders and a series of engagements to identify suitable actors to co-create the initiative and stimulate market interest for potential off-takers.

He said the NLNG is committed to be part of the effort in the decade to leverage on the country’s gas reserves to accelerate power generation solutions through gas-to-power projects.

“It will be the decade when as a nation we stop reporting deaths from pollution through the use of wood and solid fuels as domestic energy sources. And it will be the decade for empowering local small, medium enterprises (SMEs) to take advantage of the various investment opportunities that the “Decade of Gas” would attract.

“In addition to the domestic LNG scheme, NLNG has the ongoing Train 7 project with capacity to attract about $10billion in foreign direct investment. We are also looking to expand the LPG value chain by increasing our supply to the domestic market, guaranteeing LPG supply and enhancing its affordability, and enabling the development of a value network for a sustainable ecosystem,” he said.

Although Nigeria is reputed to be the largest producer of gas in Africa, its domestic gas utilization capacity is one of the lowest due to the absence of necessary infrastructure and poor awareness among Nigerians.

Under a national gas expansion policy, the government has launched a programme to create awareness among the people about gas as a viable alternative fuel for homes and industries.

The Nigeria LNG is a development partner with the Federal Government in the construction of the six-train LNG plant through the Nigerian National Petroleum Corporation (NNPC) 49% shareholding and its partners, including Shell, Total and ENI.

The final investment decision for the construction of Train 7 was signed in December 2019. On completion in 2024, the NLNG Train 7 is expected to raise its LNG production capacity from 22 million tonnes per annum (MTPA) to 30 MTPA; support Nigeria’s drive to diversify its revenue portfolio and generate more revenue from its proven gas reserves of about 200 Trillion Cubic Feet (Tcf).

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