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Tag: Natural Gas Liquids (NGLs)

  • NLNG Signs GSAs with Six Suppliers to Boost Gas Supply to Bonny Plant

    NLNG Signs GSAs with Six Suppliers to Boost Gas Supply to Bonny Plant

    NLNG has announced the signing of long-term Gas Supply Agreements (GSAs) with six third-party gas suppliers in a strategic move to strengthen feedgas supply to its existing trains on Bonny Island and support the Company’s expansion drive.

    The long-term agreements, with options for extension, were signed with SNEPCO-SUNLINK HI project, TEPNG AMNI JV IMA project, NNPCL-First E&P JV, SNG NGML, OANDO- NNPC E&P, and TEPNG JV Ubeta. The suppliers will deliver an estimated 1,290 million standard cubic feet per day (mmscf/d) or 13.3 bcm/yr of feedgas to NLNG. The volumes will be gradually scaled up over a period of time.

    The new GSAs significantly boost feedgas availability, enhancing NLNG’s capacity to meet its commercial commitments while laying the groundwork for expansion. This development is aligned with the Federal Government’s Decade of Gas initiative, which places natural gas at the centre of Nigeria’s industrialisation and energy transition agenda.

    Speaking on the agreements, NLNG’s Managing Director and Chief Executive Officer, Philip Mshelbila, described the milestone as the culmination of sustained efforts by shareholders and stakeholders to address long-standing gas supply constraints. He noted that in recent years, NLNG’s operations had been significantly impacted by pipeline disruptions, including vandalism and sabotage, affecting upstream gas availability.

    “NLNG recognises the challenges that the consequent insufficiency of gas supply has caused to its long-term buyers, customers, shareholders and more widely to the Nigerian economy. With the new GSAs, NLNG is optimistic about a sustainable gas supply for the future and remains grateful for the continuing support of its buyers and other stakeholders. It also looks forward to a successful future together.

    “We could not have achieved this without the deliberate and concerted efforts of our shareholders and stakeholders in the energy industry in Nigeria. These agreements are a turning point in NLNG’s journey, restoring reliability of supply and ensuring we remain firmly on the path of growth and expansion,” Mshelbila said.

    He further explained that the new GSAs mark a historic shift for NLNG, which since inception had relied primarily on legacy shareholder joint venture affiliates for gas supply. He said with the recent divestment of onshore assets by several International Oil Companies (IOCs) to non-shareholder entities, NLNG is now procuring feedgas from diverse third-party suppliers to meet its growing needs for both Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs) production.

    The landmark GSAs are a game-changer for Nigeria’s gas industry, enhancing local gas production capacity and improving gas supply, which are critical to the country’s energy security, industrialisation aspirations, and economic growth.

  • Vandalism threatens Nigeria LNG’s N727bn dividends in 2025

    Vandalism threatens Nigeria LNG’s N727bn dividends in 2025

    …As only two of six trains operational- Mshelbila

    The Nigeria LNG Limited (NLNG) has announced that only two of its six trains are currently operational, thanks to the activities of pipeline vandals.

    The development is a threat to the nation’s revenue streams and Nigeria LNG’s N727 billion dividends.

    Philip Mshelbila, managing director of Nigeria LNG, lamented the impact of the attacks, which have severely disrupted gas supply and crippled production.

    According to Mshelbila, the Nigeria LNG, which plays a critical role in Nigeria’s economy and global energy market, has been forced to operate at a fraction of its capacity.

    The company relies on a network of pipelines to transport natural gas from upstream suppliers to its Bonny Island facility.

    However, frequent attacks on these pipelines have led to a drastic reduction in gas supply, having left four of the company’s six trains idle.

    “In the current moment, I am only running two trains out of six. Three of our gas supply pipelines are down for repairs due to illegal connections by thieves. These are critical lines—GTS 1, GTS 2, and GTS 4—that supply the energy required for our operations,” Mshelbila said at a panel session during the Nigeria International Energy Summit on Wednesday in Abuja.

    Mshelbila expressed deep concern over the situation, stating that the vandalism not only undermines Nigeria’s reputation as a reliable LNG supplier but also results in significant revenue losses for the country.

    “Since the Russian war, I have been approached by dozens of European and other countries for LNG, but we have been unable to supply it because of this. You see what is happening with Qatar and the US. We can’t compete,” Mshelbila said.

    The Nigeria LNG, which accounts for about 7 per cent of global LNG supply, has been a major contributor to Nigeria’s economy, generating billions of dollars in revenue annually.

    Experts have warned that the persistent attacks on Nigeria LNG’s gas supply pipelines could jeopardise its projected dividends of N727 billion to the Nigerian government by 2025, a 113 per cent growth from N346 billion last year.

    Data showed the federal government has received about $21.56 billion of the $44 billion dividends disbursed by Nigeria LNG in the last 25 years.

    Nigeria LNG was incorporated as a limited liability company to harness Nigeria’s vast natural gas resources and produce Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs) for the domestic market and export.

    It is owned by four shareholders: Nigerian National Petroleum Company Limited (49 per cent), Shell (25.6 per cent), TotalEnergies (15 per cent) and Eni International (10.4 per cent).

    The reduction in production capacity is expected to have far-reaching consequences, including a decline in export earnings and potential job losses in the sector.

    Security challenges in the Niger Delta region, where most of Nigeria’s oil and gas infrastructure are located, have persisted for years.

    Despite efforts by the government and private sector to curb pipeline vandalism and oil theft, the problem remains rampant.

    Mshelbila called for urgent action to address the security issues, emphasising the need for collaboration between the government, communities, and industry stakeholders.

    “Energy security has to be seen as important as national security. However, gas security has deteriorated, and until we can safeguard these pipelines, we will continue to underperform,” he said.