Page 5 - GLNG Week 38 2022

GLNG COMMENTARY GLNG

of about 2.092 bcf (82.19 mcm) per day, or 30 behind schedule due to labour unrest, technical
bcm per year. problems, supply chain disruptions and the like.
According to the minister, Abuja expects to And with respect to production, it is truly not
make a final decision on this initiative in the near clear whether Nigeria will achieve Sylva’s stated
future. NNPCL and its Algerian counterpart aim of bringing gas yields up from 8 bcf (226.6
Sonatrach will both be involved in building the mcm) per day to 12.2 bcf (345.5 mcm) per day.
pipeline, and Italy’s Eni and other private compa- The main reason why it is not clear is that Sylva
nies have shown interest, he said. “Everybody is did not offer any parameters for this target. For
welcome” to join the project, he added. example, he did not say how quickly he expected
output to rise to the higher level, whether he
Overstating capabilities anticipated the new production streams to come
So it seems that Nigeria is planning for two large- from greenfield projects or brownfield develop-
scale pipelines, an LNG plant expansion and ment operations, how much gas was likely to
production growth of more than 50%. This is a come from deepwater fields versus shallow-wa-
very ambitious agenda – ambitious enough for it ter and onshore fields with lower production
to raise the question of how realistic it is. costs, whether additional volumes would con-
The answer to that question is: probably not sist of associated gas or natural gas or what kind
completely realistic. of support Nigeria’s government might provide
With respect to the pipelines, Nigeria is likely to producers. These are not trivial matters; they
to encounter several possible obstacles. It might are important because they help drive develop-
be caught up in the ongoing diplomatic dis- ment strategy. And without further clarifica-
putes between Algeria and Morocco if it tries tion, it is difficult to comment sensibly on Sylva’s
to build both NMGP and TSGP. It is likely to statement.
have difficulty raising the required financing,
since NMGP is expected to cost around $25bn, Little immediate relief for Europe
and TSGP $13bn. (Meanwhile, NLNG’s Train The upshot of this is likely to be, NewsBase
7 expansion project already carries a price tag believes, that Nigeria will make (and is making)
of $10bn). It may face security challenges in genuine efforts to increase the amount of gas it
northern Nigeria and along other sections of the produces and exports, particularly to the Euro-
transit route. It could find that these roadblocks, pean market.
along other problems that have not been antic- As such, European buyers are likely to snap up
ipated, slow the pace of work so much that by more Nigerian LNG in the winter of 2022/2023
the time the pipelines are finished, European gas than they did in the winter of 2021/2022. How-
demand will no longer justify their construction. ever, volumes may be slow to rise – and may not
Meanwhile, with respect to the LNG plant swing markedly upwards until the Train 7 pro-
expansion, this project is in motion and was ject is wrapped up in 2024 or later.
reported last month to be about 30% complete. In the meantime, the large-scale pipeline
It is due to be finished in 2024, and NLNG can projects touted by Sylva and Kyari will continue
reasonably expect to accomplish the 30% pro- to sound exciting but will offer no immediate
duction capacity increase it is seeking. However, results – and no immediate relief to gas-hungry
there is a strong possibility that work could fall Europe.™

Week 38 23•September•2022 www. NEWSBASE .com P5