Kayode Oluwadare, the Regional Energy Partner at Energy Compact, provided insights asserting that Nigeria’s LNG business remains unthreatened by Saudi Arabia’s recent natural gas discoveries.
According to Nairametrics, Oluwadare clarified that Nigeria’s challenges in the LNG sector stem more from production issues than market dynamics.
He pointed out that Nigeria’s Liquefied Natural Gas Limited is currently operating below 50% capacity due to persistent crude oil theft, impacting feed gas stock access. The key problem lies in the failure of joint venture partners to address feed gas challenges caused by crude oil theft. Oluwadare stressed that the global LNG market can accommodate all players, but for Nigeria to thrive, it needs substantial LNG investments comparable to Qatar and Abu Dhabi.
Regarding Saudi Arabia’s activities, Oluwadare downplayed them as a threat, attributing Nigeria’s struggles to internal factors. Investors, he noted, are turning their attention to floating liquefied natural gas (FLNG) projects, which provide easier access to offshore flared gas compared to onshore projects facing feed gas access challenges.
While acknowledging Saudi Arabia’s plans to enter the LNG market, Oluwadare expressed confidence that it would take several years for the country to develop the necessary gas liquefaction infrastructure. Despite Saudi Arabia joining other Gulf LNG leaders, Oluwadare believes Nigeria can still play a significant role in the market due to the substantial global demand for LNG.
To strengthen Nigeria’s position, Oluwadare recommended a focus on increasing non-associated gas for future LNG operations. He suggested that Nigeria could contribute effectively to the global LNG market, especially by targeting European markets favoring spot contracts over Asian markets preferring long-term contracts.
In summary, Oluwadare underscored Nigeria’s potential to thrive in the global LNG market, emphasizing that, even with Saudi Arabia’s entry, the nation can maintain a strong presence given the projected surge in global LNG demand in the coming years.
