Nigeria dismayed over stalled NLNG output

Nigeria's government is dismayed that the Nigerian LNG facility still produces at 70% of its capacity and says the NNPC-led consortium insists third parties cannot supply gas feedstock unless they do so at a subsidised rate, local newspaper BusinessDay reported April 5.

The remarks by Nigeria's minister of state petroleum resources Chief Timipre Sylva implied NLNG has been hamstrung by the consortium's policy of restricting access agreements to NLNG's facilities to third parties that agree to subsidised rates, equivalent to the price of gas sourced from its shareholders.

Nigeria has significant gas reserves but has been slow to expand its LNG capacity. NLNG currently has six trains with a combined 22.5mn metric tons/yr liquefaction capacity. The consortium began building a seventh 7.5mn train on June 15. NLNG's shareholders are state-owned NNPC (49%),  Shell (25.6%), Total (15%) and Eni (10.4%)

Sylva said adjusting the gas supply pricing for non-stakeholders would enable NLNG to capitalise on European moves to reduce Russian gas supplies amid the ongoing Ukraine war.

"The [NLNG] partners are insisting that they can only allow third party supply gas to the plant only if they agree to supply at subsidised rates," the minister said. "These people of course want to make money and they cannot supply at subsidised rates, and that's why the NLNG trains cannot produce at full capacity."