Nairametrics| The Federal Government’s share of dividends from Nigeria Liquefied Natural Gas (NLNG) dropped by as much as $687 billion, from $1.04 billion in 2015 to $365 billion in 2016, a 65% drop.
This reflects the lower price environment in the global oil and gas industry caused by an oversupply of the commodity. Furthermore, the low prices and weaker demand caused buyers to take a wait-and-see approach to long-term supply contracts according to analysts.
Nigeria, the biggest natural gas exporter on the continent and fourth largest in the world now faces increasing competition from other suppliers including Angola who was expected to return to the market in early 2016 after ceasing exports in 2015 due to repairs.
Following the relative stability seen in the market since Q4 2016, it is expected that natural gas prices may also stabilize.
Additionally, the lower gas prices are also resulting in greater demand for gas by new natural gas importing nations. According to the International Gas Union (IGU), 4 new gas importers were added to the market in 2015 and one extra in 2016, leading to an expansion of the market.
The NLNG, according to stakeholders, remains a very valuable and efficient asset of the Federal Government.