Nigeria Explores Gas Export Deal with South Korean Group
The Nigerian National Petroleum Co. Ltd. (NNPC) has engaged in discussions with a South Korean consortium regarding a potential agreement for the export of Nigerian liquefied natural gas (LNG) to South Korea.
Mele Kyari, the chief executive of Nigeria’s national oil and gas company, led a delegation to Seoul for the meeting with a consortium led by Daewoo Engineering & Construction Co. Ltd. The discussions also covered potential cooperation on gas development in Nigeria.
“The talks were aimed at deepening NNPC Ltd.’s drive to tap into the nation’s vast gas resources to be a supplier of clean and affordable energy to the global market”, NNPC reported.
“South Korea is a major destination for Liquefied Natural Gas exports and the consortium, in collaboration with the Korean Export-Import Bank, has expressed interest in advancing discussions on investing in greenfield and other gas development opportunities.
“The talks will pave the way for the execution of a Memorandum of Understanding that will unlock strategic foreign direct investment in line with the President Bola Ahmed Tinubu administration’s policy of making Nigeria a prime destination for global investors”.
As of January 1, 2023, Nigeria holds 208.83 trillion cubic feet of natural gas reserves, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). In terms of liquefied natural gas (LNG) trade, Europe has been Nigeria’s largest market, accounting for 423.8 billion cubic feet (12 billion cubic meters) of the country’s total LNG exports in 2022.
Asia-Pacific received 5.6 bcm (197.8 bcf) of Nigerian LNG in 2022, with South Korea standing out as Nigeria’s top LNG buyer with 800 million cubic meters (28.3 bcf) imported that year. Nigeria’s natural gas production has grown at a rate of 0.3 percent annually over the decade leading to 2022, reaching 40.4 bcm (1.4 tcf) that year.
A significant development in Nigeria’s LNG sector occurred in December, with the signing of an agreement by the Nigerian National Petroleum Corporation (NNPC), local energy engineering company UTM Offshore Ltd., and the Delta state government for the construction of a floating liquefied natural gas (FLNG) plant.
This project, touted as Nigeria’s first FLNG plant by developer UTM, is planned to have a capacity ranging from 1.81 to 2.72 million metric tons per annum (MMtpa).
“More than this, there are several Floating LNGs that we are promoting, including fixed LNG projects”, Kyari said in a media announcement at the time.
The $2.1-billion floating liquefied natural gas (FLNG) project in Nigeria anticipates a final investment decision in the first quarter of this year, as reported by the African Energy Chamber.
Alongside South Korea, Argentina has also expressed interest in investing in Nigeria’s gas sector, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The commission had earlier announced that Argentina, through its Ambassador to Nigeria Alejandro Herrero, conveyed its readiness to participate in gas exploration and production in Nigeria.
“The Ambassador, who was on a courtesy visit to NUPRC, told the Commission Chief Executive that his country is out to explore every opportunity for partnership and investment within the Nigerian Gas fields”, the NUPRC stated in a media announcement in November.
The bid to woo gas investors from Argentina and South Korea comes as Nigeria prepares for its gas fields auction later this year. “[T]he commission will in a matter of weeks commence auction of uncommitted Gas fields in Nigeria”, said the November report.
“[T]he petroleum fiscal systems in Nigeria is now opting for production sharing contracts as a new model of the agreement for the exploration and production of oil and gas resources”, the report said.
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