Nigeria LNG Loses $7bn To Gas Supply Constraints, Insecurity In 2022

The Nigeria Liquefied Natural Gas (NLNG) Limited says that it recorded a $7 billion loss due to gas supply constraints and insecurity in the country.

NLNG’s General Manager for Production, Adeleye Falade, said this during a panel session at the 45th Nigeria International Conference and Exhibition (NAICE) 2022, with the theme: “Global Transition to Renewable and Sustainable Energy and the Future of Oil and Gas in Africa,” on Wednesday, August 3, 2022, in Lagos.

Falade, who represented NLNG’s Managing Director, Dr Phillip Mshelbila, said the company’s 22 million tons per day plant’s production currently trends at 99.4% year-to-date availability while utilisation hovers around 68%.

He said the data between the 99.4% availability and the 68% utilisation at the moment, which was equivalent to $7 billion in revenue, was part of the effect of the critical oil and gas pipelines that were shut down due to insecurity at the facilities.

Falade lamented that the unavailability of important gas pipelines like the Abuja-Kaduna-Kano (AKK) Pipeline and the lack of gas pipelines in the eastern corridor for distribution were impacting negatively their production

He said, “I’ve spoken eloquently about the AKK Pipeline. In the eastern corridor, we also don’t have enough pipeline distribution pipelines. But the ones that we have, what has happened to them? Today, Trans-Niger Pipeline, which is the main artery in the eastern region, had been down since March. We don’t know when it’s going to come back.

“As a result of that, I don’t have gas in the LNG to run my plants. Currently trending at 99.4 per cent year-to-date availability, my utilisation is moving around 68 per cent.

“The data between that 68 per cent and the 99.4 per cent is equivalent of almost $7 billion revenue today, which would have found its way into our economy, which would have helped our government in a cash-constrained world. And I’m not talking about the impact upstream.

“So what is the guarantee around the security of even the pipeline that we have? And everybody has a role to play in that: government, security agencies, have a role to play.”

Falade added that based on the work done by the Decade of Gas policy, there was a clear three billion cubic feet (3BCF) gap between gas demand and supply, raising doubts about bridging that gap considering the lack of infrastructure and investment.