NLNG CEO says Nigeria’s global LNG market share has declined to 5%, warns of further drop

Adeleye Falade, chief executive officer (CEO) of Nigeria LNG Limited (NLNG), says the country’s position in the global liquefied natural gas (LNG) market is under threat, following the decline of its share from 6 percent to 5 percent.

Falade, also the company’s managing director, spoke during a recent NLNG Facts & Figures presentation in Lagos.

He said Nigeria’s share of the global LNG market could decline further to as low as 2 percent unless urgent action is taken to address feedstock supply challenges and expand processing capacity.

Falade attributed the decline to Nigeria’s slow capacity growth compared to global competitors that are moving faster to monetise their gas reserves.

“About three to four years ago, NLNG held six per cent of global LNG market share. Eventually, we’re down to five per cent. There are other countries that are growing,” he said.

The NLNG CEO linked the risk to Nigeria’s failure to scale up LNG processing despite its vast gas reserves.

Comparing Nigeria with other countries in the global LNG market, Falade said Australia has a proven gas reserves of about 120 trillion cubic feet (TCF) and a processing capacity of about 88 million tonnes per annum (MTPA).

He said Malaysia, with just 97 TCF of gas reserves, has a processing capacity that exceeds Nigeria’s.

“But then you look at us (Nigeria) 209 TCF and just 22 MTPA. So at that point in time, it became obvious to us that we needed to be more ambitious about our growth,” Falade said.

He said the global shift away from dirtier energy sources has created a limited window for gas-producing countries to maximise the value of their reserves.

“While the world has moved away from sources of energy that are very dirty… gas will still be dominant in the energy mix, not just for today, not just in 10, 20, 30, up to the next 40, 50 years. But we can’t assume that window will be open for a long period of time,” Falade said.

‘GAS APPLICATIONS EXTEND BEYOND POWER GENERATION TO PETROCHEMICALS, FERTILISERS’

He said gas applications extend beyond power generation to fertilisers, petrochemicals, cosmetics, and transportation, including compressed natural gas (CNG) buses.

“What all of that is doing is allowing us to be able to maximise that potential that God has given us as a country,” Falade said.

The CEO warned that unless Nigeria acts quickly, other countries will continue to capture the market share it is losing.

“That ambition is why Train 7 is underway, and why NLNG has begun exploratory work on Trains 8, 9 and 10,” Falade said.

“Still very much at the embryonic stage, but it’s one that is already having conversations around…, so we do have a growth agenda.”

Falade stressed that expansion is critical for Nigeria to remain competitive and attract long-term capital.”

He said feedstock shortages remain a major constraint to NLNG’s expansion plans, noting that the divestment of Shell and Eni from onshore assets has forced the company to diversify its gas supply sources.

“I think today, we have close to 70-75 percent of our gas supply that is now coming from outside of the affiliates of our shareholders,” he said.

Falade warned that if shortages persist, NLNG may be forced to “rethink our model”. (TheCable)