Nigeria makes new headway with floating LNG as part of gas drive - S&P Global
Nigerian LNG exports in 2023 at 9 million mt
Nigeria (already home to the 22.5 million mt/year six-train Nigeria LNG plant) is making further progress with the development of offshore LNG production as it looks to monetize its vast gas resources. As well as expanding the NLNG plant to 30 million mt/year with the construction of a seventh train, work is underway to deploy floating LNG infrastructure in the West African country. State-owned NNPC this month agreed a new heads of term with LNG specialist Golar LNG for the potential deployment of a floating LNG export facility in Nigeria having also agreed to join UTM Offshore's FLNG project in late July, S&P Global Commodities reports.
Nigeria in 2021 launched its roadmap on gas development known as "The Decade of Gas" and promised new efforts to advance its gas sector to help underpin economic development.
The government is focusing not only on fully developing the country's estimated 203 Tcf of existing proved gas deposits, but also at unlocking up to 600 Tcf in unproven gas resources.
Offshore LNG production remains a relatively new technology -- examples include the Prelude facility in Australia, the Cameroon FLNG plant and the Coral Sul project in Mozambique.
In its latest results statement Aug. 10, Golar LNG said "strong" progress with the potential deployment of Golar's FLNG vessels to various gas fields in Nigeria had been made since signing an MOU with NNPC in April.
"Under a further heads of terms signed with NNPC on Aug. 1, Golar and NNPC have agreed an integrated contractual framework for the joint development of specific gas fields towards potential FLNG projects," it said.
It said the relevant fields could fully utilize the FLNG vessel, the Hilli, following the end of her current contract in mid-2026. The Hilli is currently deployed for the neighboring Cameroon LNG export project.
UTM project
NNPC last month also agreed to take a 20% stake in the FLNG project under development by Nigeria's UTM Offshore, which is developing a 1.5 million mt/year project to take associated gas from the OML 104 block containing the producing Yoho field.
NNPC said the move was a "major step" toward bolstering Nigeria's energy security and promoting the utilization of its abundant gas resources."
NNPC and UTM Offshore on July 20 signed the heads of terms agreement for the construction of the FLNG project, which is expected to reach final investment decision by year-end for startup in 2026.
NNPC CEO Mele Kyari said the project was a "must-do" initiative for Nigeria, adding that the company was ready to secure gas feedstock toward the project.
With gas and LNG prices globally having reached record highs last year, the monetization of gas is more attractive than ever.
Platts benchmark JKM price for delivery into Northeast Asia hit a record $84.76/MMBtu in March 2022, according to S&P Global Commodity Insights pricing data. The JKM for September delivery was assessed at $12.29/MMBtu on Aug. 11.
Force majeure
Meanwhile, the Nigeria LNG facility at Bonny Island continues to produce and export LNG despite a force majeure declared in October 2022 that remains in place.
The force majeure was first declared after upstream operations in Nigeria were affected by widespread flooding followed by reports in early 2023 of disruption triggered by pipeline vandalism.
So far in 2023, Nigeria's LNG exports have reached 9 million mt, according to S&P Global data. That compares with total exports last year of 14.7 million mt.
Cargoes exported in 2023 have landed in numerous markets in Europe, led by Spain (2.7 million mt) and Portugal (1 million mt), as well as Asian markets such as China and India, the data showed.
As well as the two operational floating LNG production facilities offshore Cameroon and Mozambique, two others -- one offshore Mauritania and Senegal, and the other offshore the Republic of Congo -- are expected online soon.
