Nigeria needs to export higher LNG volumes to Germany, this is according to Kayode Oluwadare, a Regional Energy Partner and Director at Energy Compact.
He told Nairametrics on Monday, that the LNG volumes can be better, this is because LNG is in high demand right now and the demand will only increase as the years go by.
According to him, the country needs to focus on other markets as well and increase LNG supply volumes to meet growing demand.
He said:
- “The current global demand for LNG volumes is 400 million tons per annum (mtpa). Meanwhile, there are projections that by 2030, the demand for global LNG volumes will be around 700 million tons per annum (mtpa).”
The Backstory
Earlier this month, the Federal Government announced that it had signed a memorandum of understanding (MoU) with Germany through Riverside LNG to supply gas to Germany at 850,000 tons per annum, expanding to 1.2 million tons per annum.
According to the State House press release, Mr. David Ige, CEO of GasInvest, spoke about the gas supply MoU, highlighting the Riverside LNG project’s objectives during the signing.
He mentioned the project’s primary goal to supply energy from Nigeria to Germany, targeting the elimination of approximately 50 million cubic feet per day of flared gas in Nigeria.
Explaining the project’s scope, Mr. Ige stated that initially, the Riverside LNG project aims to supply energy to Germany at a rate of 850,000 tons per annum.
This capacity is expected to expand, reaching 1.2 million tons per annum over time.
Detailing the timeline, he mentioned that the inaugural shipment of gas from Nigeria to Germany is scheduled for 2026, with plans for further expansion in subsequent phases.
He also said that the initiative is anticipated to pave the way for increased and enhanced gas exports to Germany, opening new avenues for trade and collaboration.
‘The bigger the better’
A gas analyst who spoke to Nairametrics on the condition of anonymity said the numbers presented under the MoU signed with Germany on gas supply via Riverside LNG are not encouraging.
According to the source, the plan does not qualify for an LNG export project because an LNG export project cannot be based on just one buyer and as the top gas producer in Africa, Nigeria should aim higher when it comes to LNG exports.
The source said:
- “LNG business is a business of numbers, economies of scale, the bigger the better, and the numbers presented are not encouraging especially when you consider the fact that many countries in Europe, Asia, and even Africa need LNG and are building import terminals for LNG.”
The source also highlighted the fact that the Nigerian government should allow the private sector to drive gas business in Nigeria without interference.
This is because only the private sector can increase attraction to the gas sector due to its ability to tackle efficiency issues as opposed to the public sector. The source said:
- “What the private sector needs is regulatory assistance from the government so they can drive gas business in Nigeria.”
Insights on Riverside LNG
Riverside LNG is a special purpose vehicle (SPV) of GasInvest – Riverside LNG is a special purpose vehicle specializing in producing and selling small-scale liquefied natural gas (LNG).
Its production capacity stands at 700 tons per day of LNG, with plans for future growth to reach 1,400 tons per day in subsequent phases.
The primary aim of Riverside is to cater to various markets, including domestic, coastal regional, and European markets, offering its LNG products. It operates under GasInvest, its parent company, which is deeply involved in Nigeria’s natural gas sector.
Upon checking the Corporate Affairs Commission (CAC) website on Monday, November 27, Nairametrics confirmed that Riverside LNG became an active entity in November 2021.
