GMD, NNPC, Mr. Andy Yakubu
The Nigerian National Petroleum Corporation (NNPC) has said it is commencing a new trading strategy for forthcoming Liquefied Natural Gas (LNG) projects in Nigeria.
The new marketing strategy for LNG, according to the Group Managing Director (GMD), Mr. Andy Yakubu, included capturing and retaining global high value LNG markets like the Asia-Pacific market as well as improved participation in the downstream segment of the LNG value chain.
In his presentation at the maiden edition of LNG Producers-Consumers Conference, which was organised by the Government of Japan, the GMD said the corporation was compelled to expand its LNG trading strategy to include the competitive Asia market following changing market conditions in the Atlantic Basin which it services.
He said the new arrangement will ensure increased LNG supply to Asia-Pacific countries like Japan at the turn of improved capacities of in-country LNG projects like Brass LNG and OK LNG.
“Though Nigeria entered the LNG market a bit late, the country has overtime emerged a reliable supplier in the global liquefied natural gas market. As at the last count the country holds the record for the fastest growing LNG production capacity in the world,” Yakubu said.
He stated the country’s LNG production capacity had grown from a modest two train base LNG project of 8 million tonnes per annum (mtpa) in 1999 to the current six operating train capacity of 22 mtpa, adding that the six trains exported about 22 mtpa of LNG, which represents 10 per cent of world LNG production in 2011.
Disclosing that the country’s overall target was to immediately take a Final investment Decision (FID) on the Brass LNG’s 10mtpa project as well as a FID on the 7.8mtpa seventh train of Nigeria Liquefied Natural Gas (NLNG) and thereafter OKLNG, Yakubu said that with all these in place, Nigeria would comfortably service LNG needs of Atlantic and Pacific Basins respectively.
“On completion of these LNG projects Nigeria’s LNG production capacity will be over 52 mtpa,” he stated.
According to him: “Historically, Nigeria’s marketing effort was geared towards meeting the demand in the Atlantic Basin, however, changing market conditions in the Atlantic Basin have compelled a broadening of our sales strategy.
“In recognition of the new commercial reality and the need for market diversification, NNPC has developed an appropriate strategy that will provide a platform through which LNG off-takers in the Pacific region could be involved in green field LNG projects such as the Brass and OK LNG projects.”
He noted that under the arrangement, interested firms would be encouraged to invest directly in these new projects both as strategic investors and long-term LNG off-takers thus creating opportunities for base-load LNG sales contracts to Asia.
“Thus, it is envisaged for instance, that the Brass LNG project currently provides a viable opportunity to increase LNG supply from Nigeria to Japan.
“As a country, Nigeria is committed to supporting Japan’s aspirations on energy security. In pursuance of this development, two Japanese Corporations (LNG Japan and Itochu) have been selected as strategic investors to NNPC in the Brass LNG project, not only as equity stake holders, but joint off-taker of LNG volumes, significant portion of which is expected to be delivered to Japan,” he added.