Can Nigeria sustain LNG export to global market?

Nigeria is making significant strides in the global energy market with the Nigerian National Petroleum Company Limited (NNPCL) commencing deliveries of Liquefied Natural Gas (LNG) cargoes to Japan and China on a Delivered Ex-Ship basis. This development marks a pivotal shift from an over-reliance on crude oil exports to exploring the country's vast gas reserves for profitability. Femi Ojumu, Principal Partner at Balliol Myers, sheds light on how Nigeria is positioning itself in the global energy landscape while grappling with the fuel subsidy dilemma. The NNPCL's foray into LNG trading since 2021 has shown promising traction, with approximately four and a half billion dollars in Nigerian gas exports by 2022. The move comes at a critical juncture amidst geopolitical tensions and enhanced focus on energy resilience, presenting Nigeria with an opportunity to capitalize on its gas potential and meet the rising demand in Asian markets. The newly established NNPC Shipping Company under the Petroleum Industry Act of 2021 aligns with the industry's transformation agenda, offering avenues for operational efficiencies and market penetration. While Nigeria's gas exports promise economic growth and diversification, challenges persist on the home front. The government's hefty fuel subsidy expenditures, exceeding seven trillion Naira in the first seven months of the year, underscore the paradox of fuel scarcity in a crude-rich nation. The disparity between regulated fuel prices and the higher landing costs necessitating subsidies has strained the economy and led to persistent fuel queues nationwide. The imminent launch of Naira crude oil sales signals Nigeria's evolving energy landscape, with a strategic shift towards gas monetization to bolster revenue streams. As Nigeria navigates the complexities of global energy dynamics, the need for addressing domestic fuel subsidy concerns becomes imperative to alleviate the burden on consumers and ensure energy security. The upcoming months will be crucial for Nigeria to enhance its market competitiveness, foster industry collaboration, and chart a sustainable energy roadmap for the future.