Transportation, power sectors to drive mini-LNG market

Transportation and power sector are projected to drive the growth of mini-LNG market. The continuous adaptation from countries to switch to cleaner fuels for power generation and in transportation sector is driving the growth of mini-LNG market. The global mini-LNG Market is predicted to grow at approximately 2.5 percent by 2022.

The growth can be attributed to the low cost of small-scale liquefied natural gas in comparison to other fuels used in heavy-duty vehicles and reduced emissions when compared to diesel and other fossil fuels.

Increasing demand for liquefied natural gas from remote locations for use in electric power plants and global commoditization of liquefied natural gas are some of the major factors driving the demand for liquefied natural gas.

With advancement in technologies, LNG is increasingly being used in power generation applications and also to provide power to remote areas where power infrastructure is weak. The increased use of LNG is mainly due to the fact that natural gas power generation results in the cleaner generation of electricity. Lower capital costs, higher fuel efficiency, shorter construction times and reduced CO2 emissions are other advantages of using LNG.

Europe and the North America regions are investing heavily for developing the LNG gas infrastructure. Nigeria is not left behind.

Recently, the joint venture of Nigerian National Petroleum Corporation (NNPC) and Total Exploration and Production Nigeria Limited (TEPNG), signed an agreement with the Gas Aggregation Company of Nigeria (GACN) and Greenville Oil and Gas for the construction of Nigerian’s first mini-LNG project.

According, Eddy Van Den Broeke, Chairman of Greenville, the mini LNG plant would be developed in phases, with the first phase costing $500 million of equity investment, while the second phase would take another $350 million.

Although large scale LNG terminals have been preferably constructed across the world till date, the emergence of small demand centers for natural gas within small geographies is gradually shifting the focus towards miniaturizing LNG infrastructure.

However, bringing Nigeria’s first mini-LNG project to country is not without challenges.

“The big challenge today is that no bank is available to finance this investment because of the temporary problems that Nigeria is going through”, said Broeke.

But according to the minister of state for petroleum resources, the government looks prepared to deal with the challenges.

“Our first step was to set up the Nigerian Gas Management Company and Nigerian Gas Pipeline Transportation Company. I am happy that a few months after we launched the gas policy we are seeing this happen. We want to ensure that the payment issues are dealt with and made on time so there is a good financing for the project”, said Ibe Kachikwu, minister of state for Petroleum Resources.

FRANK UZUEGBUNAM