Energy
Nigeria Faces Mixed LNG Demand Outlook As NLNG Sustains Growth
Though the Nigeria LNG (NLNG) is focused on its capacity expansion plans, tilting towards bringing on-stream its Train-7, mixed projections on the global demand side are raising serious business development concerns.
Recent reports indicate that the NLNG’s Train 7 project is a significant investment, with a total cost of $10 billion, which is highly significant because Russia’s gas cuts have left the European Union (EU) looking to Nigeria as an alternative to augment its gas needs.
The Deputy Director-General of the European Commission’s Department of Energy, Matthew Baldwin, said Friday, “Europe is in a tight spot in relation to gas following the Russian invasion of Ukraine and instability in our gas market, the threat perhaps to cut off supply altogether.”
Baldwin, who visited Abuja, said the EU is looking to increase Liquefied Natural Gas (LNG) imports from Nigeria above current levels.
Nigeria currently supplies 14 per cent of the EU’s gas imports, while 60 per cent of Nigeria’s LNG shipments go to Europe, he said. “We want to expand what is currently at 14 per cent share of total LNG imports from Nigeria. We want that to go up,” he said.
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Baldwin said that the gas relationship between Nigeria and the EU has extraordinary potential, with the latter determined to deliver on it.
The NLNG is also actively participating in the 2026 International LNG Conference in Qatar, where the company is expected to highlight its commitment plans and growth strategies.
While it has been projected that Nigeria’s revenue from the export of liquefied natural gas (LNG) will get a major boost in 2026 as global output is set to jump, another interesting conversation is puncturing this hope.
It was projected that a boost in global supply will ease constraints seen since the 2022 Ukraine war, which dampened prices, and could spur demand, including from top importers China and India, analysts say.
This year marks the start of a large wave of supply that analysts expect to last until 2029, depressing prices and potentially driving more demand from emerging economies.
“2026 is expected to be a transitional year for the LNG market,” said Kpler in a report quoted by Reuters. “The market is expected to move away from tightness toward ample availability, with sufficient supply even as winter demand and storage needs emerge, particularly in Europe.”
Nigeria’s LNG exports saw a significant rebound in late 2025, hitting a five-year high in December at 2.1 billion cubic meters, driven by improved gas supply and plant utilisation, according to statistics from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The development positions Nigeria for a major surge in gas exports as new facilities, such as Nigeria LNG Train 7, come online, boosting its role as a key African supplier despite earlier challenges with theft and infrastructure.
In a new development, there are fresh concerns that as several countries invest in expanding their LNG production and export capacity, and significant quantities of the gas are expected to come online in 2026 after a record 2025, supply could soon outpace demand.
This begs the question: just how much LNG is needed to “fill the gap” as the world develops its renewable energy capacity?
Last year was a record year for LNG trade, as exports exceeded the quantities predicted in several industry forecasts.
The expansion of the world’s LNG trade has been led by the United States, which exported over 100 million metric tonnes of LNG in 2025. This was driven by several new plants coming online across the country.
The U.S. exported an estimated 111 million metric tonnes (mmt) of LNG in 2025, 23 mmt more than the previous year and far higher than Qatar’s 20 mmt, the world’s second-largest exporter, according to the data analysis firm LSEG.
LNG shipments from the U.S. contributed roughly 25 per cent of global LNG exports in 2025. The new Plaquemines facility, operated by Venture Global, the country’s second-largest export facility, shipped a reported 16.4 mmt of LNG last year after commencing operations in December 2024. Several other U.S. facilities also increased their deliveries last year following several years of investment. In December, the U.S. set a record monthly LNG export figure of 11.5 mmt.
The head of business intelligence at shipping firm Poten and Partners, Jason Feer, stated, “It is remarkable that in nine years the U.S. has gone from zero LNG exports to over 100 mmt, and the success validates the U.S. approach of selling free on board and pulling gas off the grid and the reliability of U.S. supplies.”
As the U.S. ramped up its LNG production and export capacity, there were fears of a glut. However, as the U.S. and Europe introduced sanctions on Russia following Moscow’s invasion of Ukraine in 2022, several European countries were forced to search for alternative gas suppliers, a role that the United States was well-prepared to take on.
Europe purchased 9 mmt of LNG from the U.S. in December alone, further reducing its imports from Russia.
While Europe still requires LNG, there are fears of the region’s growing overdependence on the United States, which could provide up to 80 per cent of its LNG imports by 2030.
On the other hand, as Europe ramps up its renewable energy capacity, fears of an LNG glut in 2026 and beyond are resurfacing.
The U.S. Plaquemines facility is expected to reach its full production capacity this year. Meanwhile, Cheniere’s smaller modular plants will reach full capacity or may even be expanded. QatarEnergy and ExxonMobil’s Golden Pass LNG is also expected to start production this year.
Together, U.S. LNG projects could increase the country’s annual LNG production by another 20 mmt, according to estimates.
OPEC oil output in May hit its lowest in more than two decades, a Reuters survey found, as a U.S. naval blockade cut Iran’s exports and Iran’s effective closure of the Strait of Hormuz slashed exports by other Gulf producers.
Output by the 11-member Organization of the Petroleum Exporting Countries fell by 1.06 million barrels per day month-on-month to 16.13 million bpd, the survey found.
That was the lowest monthly figure since at least 2000, according to Reuters surveys, and well below the levels seen during the COVID-19 pandemic in 2020 when demand collapsed.
The figures exclude the United Arab Emirates which quit OPEC as of May 1.
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Saudi Arabia had a further decline, although Iraq was able to increase supply due to increased domestic use, sources in the survey said.
Venezuela and Nigeria also pumped more.
Eight members of the OPEC+ producer group, which includes OPEC plus allies including Russia, had agreed to raise production in May, but the Iran war and U.S. blockade made that impossible.
The Reuters survey is based on flow data from financial group LSEG, information from other companies that track flows, such as Kpler, and information provided by sources at oil companies, OPEC and consultants.
Credit – Times of India
Shell Nigeria Gas (SNG) shared its experiences in pioneering gas distribution nearly 30 years ago, and identified the expansion of pipeline natural gas infrastructure and the market‑making role of gas distributors as critical in moving gas from a policy aspiration to a practical energy solution for Nigerian industries.
“When SNG started in Agbara–Ota over 20 years ago, demand was nowhere near what it is today,” recalled Managing Director Ralph Gbobo at a panel session on “Building a Bankable Gas Distribution Ecosystem: Infrastructure, Capital and Market Demand” at the 2nd business forum of the Association of Local Distributors of Gas (ALDG) in Abuja late last week.
Represented by Head, Gas Distribution, Chukwuka Amos-Ejesi, Raph said: “The economics was not perfect, but there was a leap of faith anchored on Nigeria’s industrialisation trajectory. That decision has proven right.”
He said SNG’s persistence proved that when demand ambition, supply certainty, enabling infrastructure, and commercial clarity come together, even if not perfectly at the start, it creates industrial clusters that can grow and attract long-term capital. “Sustainability and bankability emerge over time, as utilization deepens and confidence builds,” he pointed out.
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The theme of the forum was “From Gas Abundance to Gas Access: Reassessing Nigeria’s Gas Distribution Imperatives,” with industry leaders and other stakeholders discussing the use of gas to drive industrialisation. The panel session agreed on the need for “clear, supportive and credible policy frameworks, especially measures designed to improve the use of gas.
Ralph noted: “The introduction of gas-focused policies, notably the Petroleum Industry Act, marked a turning point. By reinforcing the role of gas in Nigeria’s energy and industrial strategy and embedding instruments such as the Network Code- a critical framework that governs the operations of the Domestic Gas market and ensures transparency and stability, and the Domestic Gas Supply Obligation which compels gas producers to allocate gas to the domestic market, the PIA significantly reduced policy ambiguity around gas development.”
He added: “The introduction of clearer pricing frameworks for gas supply and transportation and a more transparent and competitive licensing regime, has also strengthened market confidence. Together, these measures have improved producer confidence, particularly for domestic gas projects, and signaled the government’s strong commitment to gas as a driver of industrial development.”
Incorporated in 1998 as a fully Shell-owned gas distribution company, SNG currently serves over 150 clients in Abia, Bayelsa, Ogun and Rivers states, partnering with governments and other stakeholders to take the cleaner and more affordable energy to the doorsteps of industries. In the first half of this year alone, the company has connected two additional companies in Ogun State to its gas distribution network.
Photo Caption – L–R: Chairman, Association of Local Distributors of Gas (ALDG), and Managing Director, Axxela Gas Distribution, Kehinde Alabi; and Head of Gas Distribution, Shell Nigeria Gas, Chukwuka Amos-Ejesi, receiving a commendation plaque on behalf of SNG Managing Director, Ralph Gbobo, in recognition of his professional and diligent service on the Governing Board of the Association, at the Association of Local Distributors of Gas (ALDG) Business Forum in Abuja
In what is expected to provide investors and industry stakeholders with a detailed overview of Nigeria’s energy assets and opportunities, her first comprehensive Gas and Power Infrastructure Map will be unveiled at the 25th edition of NOG Energy Week.
It was gathered that the publication, developed by the Gas for Africa programme in partnership with NNPC Limited, will be launched during the annual energy conference in Abuja and is being positioned as a major step towards improving transparency and investment decision-making in Nigeria’s gas and power sectors.
Industry stakeholders have long cited the lack of consolidated and reliable infrastructure data as a major challenge to attracting investment into the sector. The new map seeks to address that gap by providing a single source of information on Nigeria’s gas and power infrastructure, including pipelines, gas processing facilities, power generation assets, LNG terminals and key transmission networks.
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Alongside the infrastructure map, organisers will also release a comprehensive report on Nigeria’s gas sector, which they describe as the most extensive industry intelligence publication ever produced on the country’s gas value chain.
The report examines developments in the sector since 2020 and covers key areas such as the NNPC Gas Master Plan 2026, gas reserves and production trends, pipeline infrastructure, capacity challenges, compressed natural gas (CNG), piped natural gas (PNG), liquefied natural gas (LNG) markets, gas-to-power projects and gas-based industrialisation.
According to the organisers, the publication provides an end-to-end assessment of Nigeria’s gas industry and offers critical insights for investors, policymakers and industry operators.
The launch comes at a time when global energy markets are undergoing significant shifts, driven by geopolitical tensions and increasing demand for alternative and secure energy supplies.
Organisers noted that Nigeria is strengthening its position as a major energy player, supported by rising crude oil production, implementation of a new Gas Master Plan and expanding refining capacity.
They said the infrastructure map and accompanying report are expected to help convert investor interest into concrete projects by providing accurate data on existing assets, infrastructure gaps and future opportunities across the sector.
Attendees at NOG Energy Week will be the first to access both publications as government officials, energy executives, investors and industry leaders gather in Abuja for the five-day event.
The conference is also expected to feature investment discussions, joint venture announcements, memorandum of understanding signings and project partnerships aimed at advancing Nigeria’s energy development agenda.
With preparations gathering momentum ahead of the event, organisers said NOG Energy Week 2026 will provide a platform for stakeholders to examine the future of Nigeria’s energy sector and its role in Africa’s broader energy transition and industrial growth.
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