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LNG: The Russians are Coming
As Nigerian gas operations forge ahead, Gazprom enters the fray
Liquefied Natural Gas (LNG) production has continued to make significant progress in this oil and gas-rich nation, building on the success of Bonny Island whose construction began more than 12 years ago. However, the industry is set to step up a gear as Gazprom, one of the world’s biggest gas companies, focuses its sights on Nigeria’s plentiful reserves.
Just a few months ago, Gazprom signed a joint venture agreement with the Nigerian National Petroleum Corp. (NNPC) to work on exploration, production, transportation, gas refining and construction of electric power infrastructure. It was a defining moment in the development of the energy industry in Nigeria and one that observers are following with keen interest.
Cash-rich Gazprom has been seeking to expand its international portfolio in the energy sector and its ambitions to prioritise investments on the African continent are well documented. Nigeria’s estimated 176 trillion cubic feet of natural gas reserves are particularly tempting to the Russian industrial giant after President Yar’Adua’s stated reforms of the oil and gas sector upon coming to office in 2007. It was then that he outlined plans to unbundle NNPC and carry out a review of contracts with the international oil companies with a view to opening up joint ventures with the banking sector to free-up investment. Industry observers believe Gazprom is poised to enter the LNG industry on a large scale in order to fulfil lucrative US, Asian and European markets in urgent need of supplies.
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