There is upsurge in the demand for Liquified Natural Gas (LNG) from Nigeria as supply disruptions continue in the Middle East.
Following the eruption of war in Iran, Nigeria has seen stronger demand for its LNG cargoes as energy disruptions from the war in the Middle East have opened commercial opportunities for the West African producer.
Buyers are increasingly looking to Nigeria because of its proximity to key consuming nations and the scale of its gas reserves, said the Executive Vice President of the Nigerian National Petroleum Company Limited (NNPCL) Olalekan Ogunleye.
Nigeria LNG (NLNG), in which NNPC is the largest shareholder, can export up to 22 million metric tons per year and is building a seventh production train scheduled for completion in 2027.
“We are right in the middle of the market. We are 10 sailing days from Europe, close to the Atlantic Basin and close to Asia,” Ogunleye said on Wednesday at the CERAWeek energy conference in Houston.
“We see commercial opportunities on top of the fact that we have the most gas reserves in Africa.”
Ogunleye said demand for natural gas has proven resilient, adding that the current geopolitical tensions would not derail its growth. He said NNPC has started talks on adding two new LNG trains and is also pursuing a 12 million metric tons per annum (mtpa) LNG project alongside gas‑based industrial hubs to tap more than 200 trillion cubic feet of reserves in Nigeria.
Martin Houston, a longtime LNG developer and consultant, said the U.S.-Israeli war on Iran has heightened the need for buyers to diversify supply risk. He said African and South American countries with gas already discovered but without a current market could benefit from rising interest in new LNG supply, including floating LNG options.
Elevated LNG costs from the US-Iran war could price out developing countries once seen as key sources of future demand growth from being able to afford supplies, LNG executives have warned.
Before the war, LNG developers were planning for a global LNG surplus beginning this year to unlock new demand in developing countries throughout the remainder of the decade. But damage to Qatar’s LNG infrastructure and disruptions to its expansion plans may make LNG too expensive for those countries’ fuel mixes, LNG executives said at the CERAWeek by S&P Global conference in Houston, Texas.
Rapid growth for downstream LNG demand will come from developing economies that have less access to credit, so they cannot afford LNG at high prices, Cheniere chief commercial officer Anatol Feygin said.
“That’s the challenge that this market is going to have to navigate with this incremental, massive shock to the system,” Feygin said.
In a separate panel, Alisa Newman Hood, executive vice president of LNG import infrastructure firm Excelerate Energy, cited Bangladesh’s decision to close all universities in early March to conserve electricity as an example of demand destruction. Wealthier Asian countries can turn to the spot market when contracted supplies are cut off, but it hits hardest on governments that cannot afford the surging prices, she said.
Long-term growth for LNG will be capped unless prices remain stable and affordable, Cheniere chief executive Jack Fusco said in another panel.
Potential delays to Qatar’s planned 40mn t/yr of expansions are the “most impactful”, Venture Global chief executive Mike Sabel said in an interview with reporters.
“That’s an enormous amount of volume that the market was expecting on a certain schedule,” Sabel said.
Traders in the forward curve have already begun pricing in the likelihood of those delays, along with the potential for 12.8mn t/yr of Qatar’s 77mn t/yr Ras Laffan being off line for three to five years after a missile strike this month.
Seasonal prices in the European benchmark TTF were trading Wednesday above $10/mn Btu through the winter of 2028-2029, Argus data show. Before the war, seasonal TTF prices were trading below $10/mn Btu from summer 2027 onward.
Nigeria: Adelabu Pledges Action On Gas Shortage As Power Supply Worsens
Amid Nigeria’s deepening electricity crisis, the Minister of Power, Adebayo Adelabu has stated that the federal government was moving to tackle the persistent gas shortages constraining generation.
The minister’s pledge came, as growing public frustration over erratic electricity continues and as generation levels continue to fluctuate due largely to inadequate gas supply to thermal power plants, which account for the bulk of Nigeria’s installed capacity.
Industry data in recent months have shown repeated dips in output, with several plants, as much as 68 per cent of them, unable to operate optimally due to gas supply constraints and payment disputes within the value chain.
Middle East tensions propel Dangote Refinery’s fuel exports
Nigeria’s Dangote Petroleum Refinery has stepped up gasoline exports across Africa as disruptions to energy flows caused by the Iran conflict, squeeze traditional fuel supply routes, curbing the cheap imports that long dominated West African markets.
Data from tanker-tracking firm Kpler show Nigeria’s exports of clean petroleum products – which include gasoline, diesel, kerosene and jet fuel – have risen to about 214,000 barrels per day so far in March from an average of 100,000 bpd in February.
Shipments to other African countries have climbed to about 90,000 bpd from 38,000 bpd previously.
The 650,000-barrel-per-day Dangote refinery has sold 12 cargoes of premium motor spirit, totalling 456,000 metric tons, on a free-on-board basis to international traders, with shipments delivered to Cote d’Ivoire, Cameroon, Tanzania, Ghana, and Togo, sources familiar with the deals said.
The sales mark Dangote’s first exports of gasoline since the plant reached full capacity in February.
OPPORTUNITIES FOR REFINERS WITH SHORTER SUPPLY CHAINS
The escalating Middle East conflict has pushed up global crude prices, lifting feedstock costs for refiners worldwide. At the same time, shipping disruptions and lower fuel availability from Europe and the Gulf have cut flows of low-cost refined products into West Africa.
That has created opportunities for suppliers with shorter supply chains.
Dangote’s owner, Aliko Dangote, has been sparring with Nigerian regulators over continued petrol imports, which he contends undermine his refinery.
Nigeria halted imports last month. Since then, domestic pump prices have risen more than 50% as the Iran conflict roiled energy markets.
The country consumes an estimated 50 million to 60 million litres of gasoline a day, nearly one-fifth of Africa’s total demand, making fuel availability and pricing acutely sensitive to swings in global markets.
For decades, West Africa has depended heavily on imported fuel cargoes from Europe and the Middle East, often of lower quality, leaving the region exposed to logistical delays and external supply shocks.
Preliminary data show that Nigerian fuel imports are at a daily average of 90,000 bpd so far in March, according to Kpler, down from 209,000 bpd for the whole of February.
Arrivals from offshore Togo, which Dangote has previously accused of being the source of dirty fuel imports into the country, have fallen to zero so far in March, compared with 60,000 bpd in February.
As the Dangote Refinery seeks to end all imports, the Middle East crisis is pushing more local fuel traders to seek supply from the refinery.
Why pay for Pro Mentorship Program?
If you haven’t yet joined the Doowe Gas Pro Mentorship Program, this is a great time to come on board and also share this opportunity with friends and colleagues who may benefit from it.
Our last session with the CFO of Lasaco Insurance Company was truly mind-blowing—packed with real industry insights, financial wisdom, and practical strategies you won’t easily find elsewhere.
Being part of this WhatsApp group gives you direct access to top industry leaders, exclusive mentorship sessions, insider knowledge on the LPG and energy business, networking opportunities, and continuous personal and professional growth—all for just ₦50,000 annually.
Don’t miss out on the chance to position yourself ahead in the industry.
👉 Upgrade to Premium Now to Attend
https://orientalnewsng.com/iran-war-threatens-global-lng-growth/
The 6-Trillion Naira Shadow: Why Nigeria’s Grid is Starving for Gas
