Nigeria’s LNG export threatened as Asian buyers turn to Mozambique

Asian countries are reaching new deals to import LNG from Mozambique, a situation which may cut down Nigeria’s share of LNG export to the Asian markets.

With large offshore gas discoveries, cheaper price and more liquefied natural gas (LNG) projects coming on stream, Mozambique has now become a new competitor on the LNG market to Nigeria, according to a report by the International Energy Agency (IEA).

LNG is gas chilled to liquid form for sea transport and Nigeria supplies about 8 percent of global LNG as well as the world’s fifth biggest LNG exporter.

South America, Asia, Europe are some of Nigeria’s biggest LNG buyers but many Asian nations prefer steady sources of LNG which is a key fuel source for them.

According to the IEA, Asia now accounts for almost 46 percent of gas trade, overtaking Europe as the world’s biggest gas importer.

Mozambique is standing in good stead for LNG exports as it presents a veritable alternative for the Asian buyers, the report said.

The country last week signed preliminary deals to sell its LNG to companies in China, Japan, the United Arab Emirates and companies in India.

When these deals successfully scale through, many buyers of Nigeria’s LNG from Asia may scale down their request volumes from Nigeria.

U.S. oil major, Anadarko Petroleum, is building the first two of up to 10 plants in Mozambique to liquefy gas for export.

Its gas finds in Area 1 of the country’s Rovuma Basin will feed the initial 10 million tonne per annum (mtpa), $23 billion export project, which is due to start by 2021.

The US natural gas boom is also poised to starve Nigeria of her Asian customers as the government recently approved projects that will ship its LNG to buyers from Tokyo to New Delhi, India.

Delays in concluding investment decision on Nigeria’s gas project like the NLNG Train 7, Brass LNG and OKLNG continue to limit the country’s drive to find new but already crowded LNG market.

Echoing some of the precarious challenges of the Nigerian LNG business, the Managing Director/CEO, Nigeria LNG Limited, Mr. Babs Omotowa, at the Chartered Institute of Personnel Management of Nigeria (CIPM) conference held recently in Abuja said the shale gas find and new mega LNG plants in East Africa are threats not made easy by the delayed passage of the Petroleum Industry Bill (PIB).

He lamented that the NLNG Train 7 which will allow Nigeria to add eight million metric tonnes or 40% to its current production capacity and attract over $12 billion investments is yet to take off years after.

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