- Nigeria LNG, the continent’s foremost producer of liquefied natural gas, is set to see a 12 per cent rise in gas supply.
- This agreement with Seplat marks only the second instance in NLNG’s history that it will be sourcing gas from a third-party supplier, underscoring the significance of this collaboration in the current operational climate.
Nigeria LNG (NLNG), the continent’s foremost producer of liquefied natural gas, is set to see a 12 per cent rise in gas supply. This is a key development aimed at addressing persistent operational disruptions caused by widespread fuel theft.
This anticipated increase follows a newly signed preliminary deal with leading local energy firm, Seplat Energy, a senior Seplat executive said.
Effiong Okon, who leads a Seplat subsidiary overseeing a vital gas project situated north of the NLNG plant in Bonny Island, Rivers State, revealed that the deal will see Seplat channelling over 150,000 tons of gas per month to the facility.
This volume surpasses NLNG’s average monthly gas intake in the preceding year by more than 12 per cent, signalling a substantial upswing in feedstock for the crucial energy plant.
The anticipated surge in gas supply offers a much-needed reprieve for NLNG, a joint venture involving the Nigerian government, Shell Plc, TotalEnergies SE, and Eni SpA.
The plant has been grappling with severely curtailed gas supplies due to the escalating menace of pipeline vandalism and fuel theft, which has significantly hampered its production capacity in recent times.
This agreement with Seplat marks only the second instance in NLNG’s history that it will be sourcing gas from a third-party supplier, underscoring the significance of this collaboration in the current operational climate.
Okon stated that both parties are currently finalising the deal’s intricate technical and commercial aspects. He expressed optimism that gas flow to the NLNG plant is expected to commence in the third quarter of the current year, potentially bringing much-needed stability to the plant’s operations.
Seplat Energy has witnessed a 50 per cent surge in its gas production following its acquisition of assets from the Nigerian arm of Exxon Mobil Corp.
The landmark agreement with NLNG is also poised to inject vital revenue into Seplat’s $700 million ANOH gas plant. Despite its completion, the ANOH plant has remained idle due to delays in the completion of a critical east-west pipeline intended to transport its output.
Katlong Alex, an analyst at the African Energy Council, hailed the deal as a “strategic convergence of need and opportunity.”
He emphasised that the agreement “enables Seplat to overcome infrastructure limitations, while helping NLNG tackle its persistent gas supply issues.”
This symbiotic relationship stands to benefit both entities significantly, ensuring a more reliable gas supply for NLNG and providing a crucial outlet for Seplat’s increased production.
Okon clarified that the agreement is intended to be a “short term” solution, pending the eventual completion of the delayed east-west pipeline.
This suggests that while the Seplat deal offers an immediate and significant boost to NLNG’s gas supply, it is viewed as a temporary measure to mitigate the current challenges.