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Absence of a comprehensive strategy in the Chinese market by Nigeria and its Africa gas producing peers may cause them to lose a foothold in the Chinese Liquefied Natural Gas (LNG) market where demand growth is being recorded.
Cheniere Energy’s Corpus Christi export terminal in Texas could start producing its first liquefied natural gas (LNG) this year, a company executive told Reuters this month. This is spurred by growth in the Chinese LNG market helping it reach Final Investment Decision (FID).
“Some LNG players in Africa may have missed or ignored this window of growth,” Olufola Wusu, a commercial/Oil & Gas, lawyer and Policy Consultant with Megathos Law Practice based in Lagos said.
Construction of two 0.7 billion-cubic-feet-per-day (4.5-million tonnes per annum) units at Corpus Christi is over 80 percent complete, Douglas Wharton, director origination of Cheniere Marketing in Singapore. Wharton said while speaking at an LNG industry conference in the city-state.
“We will hopefully start producing first LNG by this year and have made significant progress on train 3 which we are hoping to take a final investment decision (FID) on soon,” Wharton said.
With glut in the global LNG market, more volumes are being pushed into the spot market currently valued at over $90billion but the Nigeria LNG has no appetite for the spot market.
“The first set of contracts from the base project (trains 1, 2 & 3), which are 20+ years contracts are scheduled to expire between 2021 and 2023/2024. In line with the provisions of the contracts, NLNG has commenced the remarketing activities of the expiring volumes with prospective counterparties. The remarketing campaign commenced with a marketing roadshow at the Gastech Conference in Tokyo Japan in March 2017,” said Tony Okonedo NLNG Manager, Corporate Communications, in an earlier email response on the subject.
New volumes of LNG are entering the global LNG market from the United States which used to be a major importer and Australia, with a slowdown in expected economic growth in Europe and Asia. The LNG spot market is making a strong showing as more buyers shun long term contracts in favor of spot contracts.
These developments analyst say is the reason why Nigeria should be proactive about developing LNG for the local market. But issues such as gas pricing, a domestic gas supply obligation producers are required to send to power plants and the absence of serious investments in gas infrastructure in the country.
ISAAC ANYAOGU
