NLNG advocates urgent action to secure gains from gas

The Managing Director /Chief Executive Officer, Nigeria LNG Limited (NLNG), Dr. Philip Mshelbila, has urged the Federal Government to make deliberate effort to take advantage of opportunities offered by energy transition, and the recognition of gas as a transition fuel to increase its gas investment to harvest its gains.

Mshelbila gave the charge during the visit of the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, to the NLNG plant on Bonny Island, Rivers State. 

Briefing the Minister on NLNG’s operations and business, stressed the need to overcome the challenges within Nigeria’s energy sector.

He noted that failure to address the root causes of these issues would perpetuate the country’s struggle with energy poverty and result in a significant loss of revenue from the monetisation of valuable resources.

Mshelbila said: “As we embark on the journey to complete Train 7, we are on the precipice of achieving a remarkable milestone – a capacity of 30 million tonnes per annum (MTPA).

“This accomplishment will not only position us as one of the largest single-site operations globally but potentially among the top three worldwide in terms of such capacity at a single site. It is an achievement that elevates Nigeria’s standing, placing us among the top six nations in this crucial industry.

“However, the world is evolving at an unprecedented pace, and recent events, such as the Russian/Ukraine conflict, have ushered in a wave of new developments in the LNG sector.

“This surge in activity underscores the robust demand for liquefied natural gas, a demand recognized by nations worldwide as integral to the global energy transition. “Considering these dynamic changes, our position in the rankings is likely to shift rapidly, as other countries make substantial investments in LNG production. This is why we believe it is important for us to conclude Train 7 and begin to look beyond that for further expansion.

The main issue behind the challenge is crude oil theft which affects associated gas supply. The plant is half-full, not because we don’t have the capacity but because the feed gas is not there.

Crude theft

Mshelbila also said that widespread crude theft is also affecting the company’s operations. 

He continued: “Today, the biggest challenge we have, one that poses a threat not only to our existing operations but also to our expansion plans, is feed gas supply. Trains 1 to 6 currently operate at roughly half their potential capacity, a situation that has persisted for some time.

“The main issue behind the challenge is crude oil theft which affects associated gas supply. The plant is half-full, not because we don’t have the capacity but because the feed gas is not there.

“We have aspiration for Train 8, but we cannot progress that work because we have no line of sight as to where that gas will come from. We believe that the gas can only come from deep water gas but the terms for that must be addressed. At present, the Production Sharing Contracts (PSCs) that govern deep-water exploration do not offer commercially viable terms for producers. 

“Our commitment to harnessing the immense potential of natural gas will not only restore Nigeria’s reputation as a major energy powerhouse but also propel us towards a cleaner, greener future.

“With innovation, collaboration by a wide array of stakeholders, including the government, and unwavering determination, we can shape the energy landscape of tomorrow, driving economic prosperity, creating jobs, and mitigating environmental challenges through gas,” he said.

Resolving supply and security challenges 

Responding, Ekpo, assured that the Federal Government will continue to encourage engagements amongst stakeholders to resolve gas supply and security challenges and restore plans to compete with peers in the world.

According to him, NLNG stands as a leading light to Nigeria’s quest to become an energy-efficient country where clean energy, including gas, is utilised. 

He opined that all hands must be on deck to stop the loss of revenue in the sector and missed opportunities, adding that the Federal Government is engaging with investors to tap into Nigeria’s huge gas reserves. 

“The development of gas is something we should pursue vigorously. The present administration will do everything possible to address the issues. I am glad that the stakeholders in the sector, like NLNG, are not laid back.

“They are constantly seeking ways out of this issue. NLNG needs all the necessary encourage to expand. It is for the good of this country. We must be quick to make these gains in development for the benefit of our future generations,” he said.

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