By Reuters 2015-07-29 15:20:11
Nigeria Liquefied Natural Gas Company (NLNG) expects to take delivery of four LNG carrier ships before year-end and another two next year, its chief executive said, positioning the state-backed gas exporter to expand its share of the growing market.
NLNG signed agreements with South Korea’s Samsung Heavy Industries and Hyundai Heavy Industries in 2013 to acquire six LNG carrier ships, costing more than $1.2 billion, to boost its fleet of 23.
It had tapped South Korea Export and Import Bank and other lenders to fund the construction, CEO Babs Omotowa said.
Omotowa said the global market for LNG – natural gas that has been cooled to a liquid form, which shrinks the volume and makes it easier to store and ship – was forecast to grow to 430 million tonnes per year by 2030 from 230 million now.
Nigeria, with the world’s fourth-biggest LNG plant, wants to capture some of that by expanding its market share to more than 10 percent – a spot it held in 2008 – from 7 percent now, Omotowa said, without giving a time frame.
“With our growth projects train 7 and train 8, we hope to expand our capacity by 40 percent and take us back to over 10 percent,” he said in an interview in Lagos, referring to NLNG’S gas liquefaction production lines. NLNG, located on the Atlantic basin, has the capacity for 12 trains.
NLNG, owned by Nigerian state oil firm NNPC, Royal Dutch Shell, France’s Total and Italy’s Eni , has the capacity to produce 22 million tonnes of LNG a year. The company, set up 15 years ago to produce the gas for export, did not give current capacity figures.
It has long-term supply contracts with Spain’s Repsol, Italy’s Enel, Britain’s BG Group, France’s GDF Suez and Portugal’s Galp. It also sells on the spot market.
Nigeria, one of the world’s top-10 gas rich countries, has estimated reserves of 180 trillion cubit feet, Omotowa said, but it converts only about 1.5 trillion cubic feet per year to LNG.
NLNG, which generates more than $10 billion in annual revenue, is also sponsoring the construction of the first major ship yard in Nigeria at a cost of $1.5 billion, in order to develop capacity for maintaining large vessels at home.
Omotowa said LNG exports had not impacted domestic supply. The domestic gas market had been held back by a lack of infrastructure including a functional rail system to ferry gas around the country and government funding challenges, he said.
Gas demand in Africa’s most populous nation is expected to rise to 3 billion standard cubic feet (scuf) per day by 2017 as gas-fired power plants ramp up generation, industry officials say. Demand has risen to 1.2 billion scuf per day, from 300 million six years ago.