Energy
NNPCL, Partners Ink 20-year 1.29bscf/d Feedgas Supply Deals
Some upstream gas suppliers and the Nigerian National Petroleum Company Limited (NNPCL) have inked long-term Gas Supply Agreements (GSAs) with the Nigeria Liquefied Natural Gas Limited (NLNG), which will involve delivery of 1.29 billion standard cubic feet per day (bscf/d) of feed gas.
This emerged as the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, mouthed that President Bola Tinubu remains committed to ensuring that oil companies that once exited the country are compelled to return, given the recent incentives provided in the sector by the government.
The 20-year agreements, with extension options between the NNPC and GSAs, were signed in Abuja, by the NLNG and Amni International Petroleum Development Company Limited; Sunlink Energies and Resources Limited; First Exploration & Petroleum Development Company Limited; SNEPCo; NNPC Gas Marketing Limited; NNPC E&P Limited; Shell Nigeria Gas Solutions Limited; Oando Group; and Aradel Holdings.
According to a statement from the state oil major, the agreements are aimed at bridging the prolonged shortfall in upstream gas availability, and marks a major boost for Nigeria’s energy transition agenda and the federal government’s gas reforms aimed at strengthening the nation’s economic prosperity and energy security.
At the signing ceremony, the Group Chief Executive Officer of NNPCL, Bayo Ojulari, commended NLNG’s shareholders and the government for their long-term commitment to value delivery despite the challenges faced over the years.
He described the agreements as a giant step towards value creation and sustainable gas supply. “These GSAs have opened up opportunities for the growth of our industry both for local and international development. They’re hinged on collaboration, synergies and opportunities. We need to leverage economies of scale, share risk and opportunities for us to attain Mr. President’s Decade of Gas vision,” he said.
Ojulari lauded the enabling environment and private sector support fostered by Tinubu.
“It is important to commend the President’s tremendous effort that has enabled the business through the issuance of Executive Orders targeted at gas developments and ease of doing business,” he added.
The GCEO reaffirmed NNPC’s readiness to accelerate the realisation of the Presidential Executive Orders for the industry, pledging to work with partners to unlock opportunities for collective prosperity, in line with the national gas development targets for incremental production.
On his part, NLNG Managing Director, Philip Mshelbila, hailed the GSAs as a game-changer for Nigeria’s gas industry, and noted that they will enhance local gas production capacity, improve supply reliability, and advance the nation’s energy security, industrialisation aspirations, and economic growth.
“We could not have achieved this sooner without the deliberate and concerted efforts of our shareholders and stakeholders in the energy industry in Nigeria. These agreements are a turning point in NLNG’s journey, restoring reliability of supply and ensuring we remain firmly on the path of growth and expansion,” Mshelbila noted.
According to him, the new GSAs reinforce Nigeria’s role in the global energy market while strengthening feed gas supply to the Bonny Island plant and supporting the company’s expansion drive.
The Nigeria LNG Limited (NLNG) is an incorporated joint venture (IJV), with NNPC Ltd holding 49 percent, Shell Gas 25.6 percent, TotalEnergies 15 percent, and Eni International 10.4 percent.
The third-party gas suppliers, in a separate statement pointed out that the move is strategic to strengthen feedgas supply to its existing trains on Bonny Island and support the company’s expansion drive.
It said the new GSAs represent a significant boost to feedgas availability, enhancing NLNG’s capacity to meet its commercial commitments while laying the groundwork for expansion.
“This development is aligned with the Federal Government’s Decade of Gas initiative, which places natural gas at the centre of Nigeria’s industrialisation and energy transition agenda,” it added.
Meanwhile, Lokpobiri, mooted that Tinubu is ensuring that oil companies which once exited the country are compelled to return, given recent incentives provided in the sector by the government.
To this end, the minister noted that Nigeria is strengthening its position as a top global investment destination, welcoming international partners back to its oil and gas industry with competitive incentives and a renewed commitment to collaboration.
A statement in Abuja by the minister’s Special Adviser on Media and Communication, Nneamaka Okafor, said Lokpobiri made the remarks while receiving a delegation from Vaalco Energy, an American independent oil and gas exploration and development company.
In recent years, Nigeria has introduced a range of incentives in the oil sector aimed at attracting investment, boosting production, and stabilising revenues. Central to this is the Petroleum Industry Act (PIA) of 2021, which overhauled the fiscal and regulatory framework.
The law provides for more competitive royalty and tax regimes, especially for deep offshore and frontier acreages, where exploration costs are high as well as ensure that investors are offered production allowances, reduced hydrocarbon tax rates, and flexible royalty structures tied to price and terrain.
Beyond fiscal reforms, the government has also promoted gas development through incentives such as tax holidays, zero customs duties on equipment, and capital allowances for companies investing in domestic gas supply and infrastructure.
According to the statement, the American firm has also already expressed interest in re-entering Nigeria through the acquisition of Svenska’s PSC interest in Oil Mining Lease (OML) 145.
“The Government of President Bola Ahmed Tinubu is particularly interested in creating a better environment for companies that were once here but left for various reasons to return. We are prepared to offer incentives comparable to the best available globally.
“It is gratifying for us as a nation when those who have worked here become ambassadors, speaking of how friendly and conducive Nigeria is for business. We are glad to welcome you back,” Lokpobiri, who commended Vaalco’s renewed interest in Nigeria, was quoted as saying.
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Lokpobiri assured that Nigeria’s oil sector policies now provide clarity, fiscal stability, and investor-friendly frameworks that encourage long-term partnerships.
“Your renewed presence will help us ramp up production and achieve our national energy objectives. Together, we can build a future of shared growth and prosperity,” he stressed.
In his remarks, Vaalco Energy’s Managing Director, Pieter Van der Groen, said the company still sees Nigeria as a key investment hub, explaining that as a listed company in the US, the firm already has access to funding.
“We are here to seek regulatory guidance for acquiring Svenska’s interest in OML 145, but more importantly, to return to Nigeria and invest in a stronger way. As a New York Stock Exchange-listed company, we have access to funding to develop the assets we acquire. We are not here to sit on them; we are here to produce,” the MD stated
A call has gone to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) the members of the Crude Oil Refinery Owners Association of Nigeria (CORAN) to start participating in the next oil block licensing round as a strategic option for securing affordable crude feedstock for their refineries.
The Chief Executive, NUPRC, Oritsemeyiwa Eyesan, made the on Wednesday during a courtesy visit by members of CORAN to the Commission’s headquarters in Jabi, Abuja, where both parties held discussions on strengthening domestic refining capacity, crude supply sustainability, and collaboration between upstream producers and local refiners.
According to Eyesan greater participation of indigenous refiners in upstream asset ownership would help create more stable and commercially viable crude supply arrangements, while also deepening local participation across the petroleum value chain.
She further assured members of CORAN that Nigeria has sufficient crude resources to support domestic refining ambitions and reiterated the Commission’s commitment to promoting policies that prioritize in-country value addition.
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Eyesan therefore encouraged refinery operators to enter into long-term crude supply contracts with producers as a practical mechanism for ensuring predictable feedstock availability, operational planning, and pricing stability.
The NUPRC Chief however, acknowledged that infrastructure limitations must be tackled before the country can witness seamless crude supply to local refineries. She identified issues such as inadequate pipeline networks, evacuation bottlenecks, storage constraints, marine logistics, and other supply chain gaps as areas requiring urgent investment and coordinated action.
Members of CORAN used the visit to commend the Commission’s ongoing regulatory reforms and its support for domestic refining development, while also emphasizing the need for stronger implementation of frameworks that guarantee regular crude supply to local plants.
Industry stakeholders have increasingly argued that improved access to crude feedstock remains central to reducing Nigeria’s dependence on imported petroleum products, strengthening energy security, conserving foreign exchange, and creating jobs through the growth of local refining capacity.
The meeting is seen as another step in ongoing engagements between regulators and private refinery operators aimed at unlocking the full potential of Nigeria’s downstream petroleum sector.
Nigeria’s gas industry supplied 62 percent of gas produced to foreign markets in the first quarter of 2026, though the domestic demand remained largely unmet.
This was detailed in data from factsheets by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), an average of 4.832 bscf/day was produced during the quarter but allocations increasingly skewed toward exports — leaving power generation, industries, and households under pressure.
The factsheet showed that while production remained relatively stable — January (4.837 bscf/day), February (4.771 bscf/day), and March (4.888 bscf/day) — domestic utilization steadily weakened as export demand intensified.
In contrast, average daily gas supplied to the domestic market dropped to 1.906 bscf/day in January, 1.763 bscf/day in February, and 1.855 bscf/day in March, indicating that the local market is increasingly treated as a balancing segment — absorbing cuts whenever export demand rises.
At the center of this shift is the Nigeria LNG Limited, which saw gas supply to its six operational trains rise consistently from 2.931 bscf/day in January to 3.018 bscf/day in February and 3.033 bscf/day in March.
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By March, NLNG alone accounted for about 62% of total gas exports, significantly tightening volumes available for domestic use.
The factsheet showed that sharp decline in gas allocations to thermal power plants nationwide is driven primarily by allocation and offtake decisions rather than any underlying supply shortage.
Gas-to-power supply declined sharply by 25% within one quarter, dropping from 0.648 bscf/day in January to 0.536 bscf/day in February and 0.485 bscf/day in March.
This contraction directly correlates with persistent grid instability and electricity shortfalls nationwide witnessed during the quarter.
Average daily gas supply to industrial users remained largely flat — 0.431 bscf/day in January, 0.440 bscf/day in February, and 0.430 bscf/day in March — indicating that constraints on manufacturing and petrochemical output stem less from infrastructure limitations and more from inconsistent allocation of gas.
Meanwhile, Nigeria’s cooking gas market tipped into deficit.
Supply, which stood at 5,110 MT/day in January and 4,703 MT/day in February, failed to keep pace with demand in March, where 4,726 MT/day supply lagged behind 5,122 MT/day consumption, resulting in an approximately 400 MT/day shortfall.
This tightening supply to demand balance has sustained high retail prices, which ranges from N950/kg to N1,550/kg during the quarter, thereby forcing many households to revert to alternative fuels such as charcoal and firewood.
Commercial gas supply showed moderate volatility, rising from 0.573 bscf/day in January to 0.628 bscf/day in February, before easing to 0.601 bscf/day in March, showing uncertainty in supply planning for commercial users — particularly in emerging segments such as CNG-based transportation.
In contrast, supply to gas-based industries — including fertilizer, petrochemicals, and manufacturing — remained largely flat at 0.431 bscf/day in January, 0.440 bscf/day in February, and 0.430 bscf/day in March, pointing to stagnation in industrial feedstock availability.
This suggests that constraints are driven less by processing capacity and more by inconsistent and unreliable gas allocation.
Despite the Petroleum Industry Act’s intent to safeguard domestic supply through delivery obligations, findings indicate these commitments are increasingly being sidelined, as export-oriented allocations take precedence.
On the export front, combined flows through NLNG and the West African Gas Pipeline averaged about 0.156 bscf/day in Q1, reinforcing the steady outward push.
The LNG shipments alone grew by 6.4%, rising from 52,857 MT/day in January to 56,241 MT/day in March, outpacing every domestic segment.
The Dangote Refinery supplied about 72.3 percent of Nigeria’s total domestic demand for petrol in March, while consumption fell by approximately 17 percent during the period under consideration from 56.9 million litres per day in February to 47.3 million litres last month.
Besides, although still modest compared to last year’s massive importation, the share of petrol imports in the supply mix surged by 96.7 percent month-on-month, rising from 3 million litres per day to 5.9 million litres/day during the period.
Data from the March 2026 fact sheet on midstream and downstream petroleum operations provided by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) yesterday, showed that the 47.3 million litres per day consumption for march fell below the national average of 50 million litres per day.
Overrall, the data indicated that total domestic petrol supply stood at 34.2 million litres per day in March. When measured against total consumption of 47.3 million litres per day, this placed Dangote Refinery’s contribution at approximately 72.3 percent of the domestic market, reaffirming its dominant role in the country’s fuel supply chain.
However, the supply mix also reflected a sharp increase in the role of imports. The fact sheet showed that petrol import contribution rose from 3 million litres per day in February to 5.9 million litres per day in March, equivalent to a 96.7 percent jump in import share.
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However, this increase in imported petrol between February and March was despite the downstream regulator’s insistence that it has halted the issuance of import licenses to oil marketers for months.
For over a year, owner of the 650,000 barrels per day facility in Lagos, Aliko Dangote, has pushed to end petrol imports in order to, according to him, protect local refining and grow the economy. Dangote’s refinery, which began production of petrol in 2024, has argued that Nigeria’s import licensing regime undermines local refining by allowing marketers to continue bringing in petrol even when domestic supply is increasing.
The company has maintained that under the Petroleum Industry Act (PIA), imports should only be permitted when there is a clear supply shortfall, not as a parallel system competing with local production.
On the other hand, oil marketers and a cross section of Nigerians believe that leaving the market solely for Dangote, without any competition from any other refinery, especially from NNPC’s defunct Port Harcourt and Warri refineries will lead to a monopoly and inflated pump prices.
The NMDPRA fact sheet further showed that other domestic refining sources contributed only marginal volumes, specifically diesel refining. The three operational modular refineries: Walter Smith, Edo Refinery, and Aradel collectively supplied about 0.629 million litres per day of diesel during the month.
Walter Smith refinery operated at an average capacity utilisation of 59.56 per cent, supplying 0.241 million litres per day. Edo Refinery recorded 64.69 percent utilisation with 0.051 million litres per day, while Aradel posted 58.84 percent utilisation, delivering 0.337 million litres per day.
Average diesel consumption during the period stood at 14.5 million litres daily, slightly above the 14 million litres per day national benchmark, despite the rising prices as a result of the Middle East crisis, indicating sustained demand from industrial and commercial users.
Similarly, in March, aviation fuel consumption remained lower at 2.1 million litres per day compared to the 3 million litres per day benchmark for the country and against the 2.9 million litres per day supplied in February.
In the whole gas market segment, total supply averaged 4.888 Billion Standard Cubic Feet Per Day (Bscf/d). Of this, 3.033 Bscf/d was supplied to the Nigeria LNG (NLNG), representing approximately 62 percent of total gas supply.
Domestic gas supply stood at 1.855 Bscf/d, with utilisation spread across key sectors. Gas-to-power accounted for 0.485 Bscf/d, commercial consumption stood at 0.430 Bscf/d, and gas-based industries utilised 0.601 Bscf/d.
In the Liquefied Petroleum Gas (LPG) segment, the NMDPRA data indicated that demand outpaced supply during the period. Average daily supply stood at 4,726 metric tonnes, while consumption reached 5,122 metric tonnes per day, leaving a shortfall of 396 metric tonnes daily. Also, retail LPG prices ranged between N980 and N1,450 per kilogramme nationally.
Fuel sufficiency data showed that petrol stock levels stood at 21 days, including pumpable volumes at the Dangote Refinery, diesel sufficiency was 55 days, aviation fuel stood at 109 days, and LPG at 14 days.
In the same vein, the midstream and downstream regulator put the Ajaokuta-Kaduna-Kano (AKK) gas pipeline completion level at 79.23 per cent; OB3 River Crossing at 59.50 per cent and the Odidi-Warri Expansion Project (OWEP) at 67.34 per cent completion rate.
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