Before US takes over European LNG market

Nigeria should be in position to take advantage of European countries’ quest to wean itself from Russian natural gas supplies. Between 1999 and 2006, Nigeria was deemed the fastest growing LNG country in the world because every 18 months, the country was adding a new train. However, from 2007 to date, no new capacity has been added. The 10mtpa Brass LNG and 20mtpa Olokola LNG have been unable to reach Final Investment Decision (FID). Only recently, the NLNG awarded FEED contract for its Train 7 as it gets ready for FID.

“Some prediction is that global capacity will move from the over 285 million tonnes (MT) per annum capacity to about 400MT in 2025 but a lot of that is projections. Some of that is forecast but what I want to know is that the additional 8MT capacity that Train 7 will bring to market in a very competitive manner”, Tony Attah, chief executive, NLNG told Businessday in a recent interview.

While we wait for the additional LNG capacities, the European commission is seriously mulling for LNG supplies from United States.

Jean-Claude Juncker, President, European Commission and US President Donald Trump in late July included considerations for LNG in their bilateral trade relationship. A joint statement from the meeting said European countries want more LNG sourced from US shale basins to diversify the European market. European Commission trade officials will travel to Washington on August 20 to follow up on the energy agreement.

Europe relies heavily on Russia for oil and natural gas which is often a source of tension given anti-trust concerns about Russian energy company Gazprom and the tendency of the Kremlin to use energy as a tool for political influence.

“The growing exports of US liquefied natural gas, if priced competitively, could play an increasing and strategic role in EU gas supply,” Juncker said in a statement. “But the US needs to play its role in doing away with red tape restrictions on liquefied natural gas exports.”

Europe received about 10 percent of total US exports last year, up from 5 percent in 2016 after the American shale gas revolution went global with the opening of the Sabine Pass export facility on the country’s Gulf of Mexico coast. Since then, Europe has imported more than 40 LNG cargoes from the US, or 2.8 Bcm, the Commission said.

Still, that is just a fraction of Europe’s demand of almost 550 Bcm last year. Most gas arrives by pipelines from Russia and Norway, as well as in LNG tankers from Qatar, the biggest producer of the super-chilled fuel.

FRANK UZUEGBUNAM