European Union intensifies pressure on FG to replace Russian gas with Nigerian supplies

The European Union (EU) has intensified its pressure on Nigeria for additional gas supplies to the bloc as it gets set to cut supply from Russia due to its invasion of Ukraine.

This was made known by the Deputy Director General of the European Commission’s Energy Department, Matthew Baldwin, at a meeting where he led a delegation to talks with the Minister of State for Petroleum Resources, Timipre Sylva, and other government officials.

Baldwin who stated that the visit was part of an effort to establish a new sustainable partnership and renewed investment drive with Nigeria, reiterated the EU’s commitment to making ongoing gas projects a reality.

Nigeria to improve security in Niger Delta and increase gas exports

Sylva during the meeting said that the federal government was improving on the security situation in the Niger Delta, suggesting a multi-faceted approach to resolving the massive oil theft, vandalism and outright sabotage of Nigeria’s oil facilities which have combined to hobble Nigeria’s ability to meet its crude production quota.

The federal government told the EU delegation that Nigeria planned to re-open the Trans Niger pipeline after August, which would yield more gas exports.

The minister also called for a collaboration between the federal government and the EU in the areas of security, technology deployment, project financing and more private sector participation to meet the country’s plan of stepping into the void created by the aftermath of the Russian-Ukraine altercation.

What the Head of the European Commission delegation is saying

Baldwin revealed that the EU imports 14% of its total LNG supplies from Nigeria and there is potential to more than double this, Baldwin told Reuters by phone.

Oil and gas output in Nigeria has been negatively impacted by theft and vandalism of pipelines, leaving gas producer Nigeria LNG Ltd’s terminal at Bonny Island operating at 60% capacity.

Baldwin said, “If we can get up to beyond 80%, at that point, there might be additional LNG that could be available for spot cargoes to come to Europe.

“They (Nigerian officials) said to us, ‘Come and talk to us again at the end of August because we think we can deliver real progress on this.”

What you should know

• Recall that a few days ago, the European Commission urged the EU member states to cut their gas use by 15% from August to March as an emergency step after Russian President, Vladimir Putin, warned that Russian supplies sent through the biggest pipeline to Europe could be reduced further and might even stop.
• The target would initially be voluntary, but would become mandatory if the Commission declared an emergency.
• The disruptions caused the Russia-Ukraine war have hampered Europe’s efforts to refill gas storage before winter, raising the risk of rationing and another hit to fragile economic growth if Moscow further restricts flows in retaliation for Western sanctions over the war in Ukraine.
• The European Commission President, Ursula von der Leyen, said, “Russia is blackmailing us. Russia is using energy as a weapon. And therefore, in any event, whether it’s a partial, major cut-off of Russian gas or a total cut-off of Russian gas, Europe needs to be ready.’’
• Last year, Nigeria exported 23 billion cubic metres (bcm) of gas to the EU, but the figure has been declining over the years. In 2018 the bloc bought 36 bcm of LNG from Nigeria, Baldwin said.