LNG: Nigeria’s gateway to global energy leadership
By Yunus Yusuf
A sigh of relief may come the way of Nigeria as a major player in the energy sector have provided the available opportunity that tapped.
This is apparently the observation of stakeholders position at the global energy transition 2024 World LNG Summit and Awards.
The theme of the summit is “Achieving the Balance Between Energy Security and Decarbonisation,”.
As a major player in the liquefied natural gas (LNG) sector, the summit provided the platform for Nigeria to advance its role in the global energy transition.
With industry giants from across the world, the event no doubt served as a vital platform for strategic collaboration, partnerships, and technological innovation.
Nigeria, with its vast natural gas reserves, has for decades been one of the world’s largest producers of the product.
However, the country has faced several challenges like underinvestment and infrastructural bottleneck in the exploitation of its LNG potential.
The 2024 summit offered stakeholders-government and energy companies-the chance to engage global leaders to discuss pressing issues like climate change and energy security, and explore new markets and technologies.
Led by President Bola Tinubu, Nigeria is working round-the-clock to position natural gas as a key element of the country’s energy transition.
At the summit, Nigerian leaders presented their national energy plans, highlighting the country’s untapped reserves and attracting global investors to support its LNG sector’s growth.
However, technocrats observed that one of the major advantages for Nigeria in this respect is the potential to forge strategic partnerships with global LNG producers, technology providers, and financial institutions.
These partnerships could lead to significant investment in infrastructure, including the expansion of LNG export terminals, pipelines, and storage facilities.
From this engagement, Nigeria stands to benefit from advancement in LNG research and technology, especially as the world shifts toward cleaner energy practices.
The summit also presented the opportunity to tackle Nigeria’s natural gas flaring issue through new technologies and financing mechanisms.
A critical aspect of Nigeria’s LNG strategy is securing favorable global LNG pricing mechanisms.
As natural gas gains prominence as alternative other sources of energy like coal and oil, establishing a favorable trade agreements will solidify its position as a leading LNG exporter.
The summit also presented credible insight into shifting market trends, including the growing demand for LNG in emerging economies and its future role in developed nations’ energy mixes.
Geopolitically, the disruption caused by Russia’s invasion of Ukraine has led many European countries to seek alternatives to Russian fossil fuels.
Nigeria’s LNG could play a crucial role in Europe’s energy future as the summit offered Nigerian delegates insight into the exploration of new export routes and secure long-term contracts, strengthening its position in the global market.
The summit was also an eye opener to alignment of energy strategy with the current global shift toward cleaner, renewable energy sources.
While the transition presented challenges, it also offered opportunities, particularly in hydrogen production and low-carbon technologies.
Nigeria’s LNG industry can also position itself as a cleaner alternative to coal, thereby, contributing to global net-zero goals.
Equally, the summit provided Nigerian companies, including startups, with the opportunity to showcase their innovations in LNG, through exposure and international attraction.
By this, sector players believed could accelerate the growth of the LNG sector, fostering both domestic economic growth and the country’s standing in the global energy market.
Despite its vast reserves, Nigeria’s LNG exports have been facing stiff competition from other major producers like Qatar, Australia, and the United States.
The post-summit gains should now include focus on global LNG market dynamics, including pricing, supply-demand projections, and emerging market trends.
For Nigeria, the summit was a good opportunity for further education on export strategy and competitive edge in the evolving LNG market.
By tapping into cutting-edge technologies and participating in discussions on the future of LNG, Nigeria can significantly benefit from the knowledge shared at this global event.
Experts however are quick to emphasise that with its LNG potentials, Nigeria is a force to be reckoned with but for challenges such as infrastructure limitations, funding gaps, and regulatory hurdles remain.
These obstacles have continued to hinder the country’s ability to capitalise fully on its natural gas resources the deficit which the summit provided a chance to address.
Mr Dumnam Dekor, Chairman of the House Committee on Host Communities, underscored the importance of revisiting policies for a better support for host communities, especially those impacted by LNG facilities.
He highlighted the need for comprehensive policy reforms to align with global trends and ensure that LNG benefits are equitably distributed.
Mr Hart Godwin, another Nigerian lawmaker, emphasized the importance of increased investment in upstream energy projects, particularly in deep-water gas production.
He called for a regulatory environment conducive to competition and stressed the need to address security challenges, which affect production costs.
Godwin also praised President Tinubu’s executive order on oil and gas reforms, which includes tax incentives to boost Nigeria’s LNG competitiveness.
Abdulmalik Halilu, Director of Monitoring and Evaluation at the Nigerian Content Development and Monitoring Board, highlighted the importance of regional cooperation in addressing global climate goals.
He stressed that Nigeria must view net-zero ambitions from a continental perspective and adopt regulations that foster cooperation within ECOWAS and Africa as a whole.
Halilu also discussed the role of financial institutions in funding LNG projects, explaining that environmental, social, and governance (ESG) criteria are not meant to limit development but to ensure responsible field development that minimides environmental harm.
He advised Nigerian companies to focus on developing indigenous capabilities in LNG infrastructure, reducing reliance on foreign expertise.
In the same vein, Mr Olajide Bamidele, a Director at the Federal Ministry of Trade and Investment, emphasized the growing dominance of LNG in global energy markets.
However, he warned that Nigeria must address the challenges related to competition and climate change.
He called for a national focus on alternative energy sources and strategies to maintain LNG’s position in the market for the next 10 to 20 years.
“As the LNG industry evolves, the summit offers critical insights into the global energy transition.
“Nigeria’s participation provides opportunities to modernise its LNG sector, forge strategic partnerships, and tap into technological innovations that will shape the future of global energy.
“With its vast reserves and commitment to energy transition, Nigeria is well-positioned to harness the full potential of its LNG industry and become a global LNG powerhouse,” he added.
