Saudi Arabia’s new natural gas discoveries are no threat to Nigeria’s LNG business. This is according to the Regional Energy Partner at Energy Compact, Kayode Oluwadare.
He told journalists on Monday, that the new natural gas discoveries in Saudi Arabia do not pose a threat to Nigeria being a partaker of the global liquefied natural gas (LNG) market.
According to him, Nigeria’s LNG business challenge is not a market-side problem; rather, it is a production-side problem. He said that Nigeria Liquefied Natural Gas Limited is currently operating below 50 percent capacity due to consistent crude oil theft – a situation which has compounded feed gas stock access to a high degree. He stated further that the global LNG market is big enough to accommodate everyone but if Nigeria is unable to secure significant LNG investment on the scale of Qatar and Abu Dhabi, he sees the situation affecting future LNG projects in Nigeria.
He said, “I do not think the activities in Saudi Arabia are a threat to Nigeria. The issue here is that the JV partners of the Nigerian Liquefied Natural Gas (NLNG) Limited have failed to tackle the feed gas problem in the country which has been a challenge due to crude oil theft. “Investors are now looking at floating liquefied natural gas (FLNG) projects to invest in, instead of onshore liquefaction plants. This is because, with that, they are able to access flared gas offshore as the onshore feed gas access is a challenge.”
Oluwadare also said that although Saudi Arabia has mentioned that it has plans to delve into the LNG market, typically, it will take eight to ten years to fully develop gas liquefaction infrastructure and he is sure that as a new entrant into the global LNG market, there is a likelihood that LNG from Saudi Arabia will not be ready in this decade. He stated further that although Saudi Arabia will join other Gulf LNG leaders – Oman, Qatar and Abu Dhabi in the global LNG market, it is not a problem for Nigeria because the demand for LNG is so huge that Nigeria can still be a player in the market. To buttress his point, he said that the current global demand for LNG volumes is 400 million tons per annum (mtpa). Meanwhile, there are projections that by 2030, the demand for global LNG volumes will be around 700 million tons per annum (mtpa). Oluwadare recommends that Nigeria should have more non-associated gas for future LNG operations and then it can effectively contribute its quota to the huge opportunities available in the global liquefied natural gas (LNG) market, mostly targeting European markets which favour spot contracts as opposed to Asian markets that favour long-term LNG contracts. On Sunday, November 19, Saudi Energy Minister Prince Abdulaziz bin Salman shared exciting news about the identification of two new gas fields in Saudi Arabia — one located in the Eastern Province and another in the Empty Quarter region.
The Ministry of Energy, through an official statement, revealed that Saudi Aramco, the national oil company, made the initial discovery at the Hanifa reservoir in the Al-Hiran-1 well.
The field was uncovered after gas surged at a rate of 30 million standard cubic feet (scf) per day from this reservoir, alongside 1,600 barrels of condensate.
Additionally, gas was found flowing at a rate of 3.1 million standard cubic feet (scf) per day from the Arab-C reservoir within the same field.
The second breakthrough occurred at the Al-Mahakek-2 well, witnessing natural gas flow at a rate of 0.85 million scf per day.
Notably, in previously discovered fields, five other reservoirs revealed the presence of natural gas. This included the Jalla reservoir within the Assekra field, where gas streamed at a rate of 46 million scf per day.