Dear Readers,
In a decisive step forward for Nigeria’s gas industry, the Nigeria LNG Limited (NLNG) has entered into a series of landmark long-term Gas Supply Agreements (GSAs), with extension options, with six (6) third-party suppliers. Under the agreements, up to 1,290 mmscf/d (13.3 bcm/yr) of feed gas will be supplied to its Bonny Plant, with supply volumes set to increase progressively over time.
The counterparties include:
- SNEPCO-SUNLINK HI PROJECT
- TEPNG-AMNI JV IMA PROJECT
- NNPCL-FIRST E&P JV
- SNG-NGML
- OANDO-NNPC E&P
- TEPNG JV UBETA.
This development comes at a critical juncture. In March, Bloomberg reported that natural gas supply to NLNG had plunged by 80% owing to persistent vandalism and sabotage across critical infrastructure. These disruptions have impaired operations at NLNG and dampened Nigeria’s liquefied natural gas (LNG) export potential. Given that NLNG consumes nearly 3.5 billion cubic feet (bcf) of gas daily, more than several industrialised countries, ensuring supply security is not just a commercial imperative but a national one.
According to the NNPC, the GSAs are designed to close the prolonged gap in upstream gas availability, while providing a significant boost to Nigeria’s energy transition agenda and advancing the Federal Government’s gas reforms aimed at promoting economic prosperity and energy security.
At the signing ceremony, NNPC’s Group Chief Executive Officer, Bayo Ojulari, described the agreements as a “giant step towards value creation and sustainable gas supply.” He emphasised the spirit of collaboration and risk-sharing that underpins the GSAs, framing them as a cornerstone for achieving the “Decade of Gas” vision. Similarly, NLNG’s Managing Director, Philip Mshelbila, hailed the agreements as a “game-changer” poised to enhance local gas production capacity, improve supply reliability, and reinforce Nigeria’s position in the global energy marketplace.
What makes this new NLNG gas supply framework particularly significant is that it departs from the old shareholder-only model, where gas was supplied to NLNG exclusively by its shareholders. With stronger indigenous players, IOC divestments, and shifting market realities, the sector now demands a more inclusive approach. These agreements broaden participation, align interests, and create a pathway for unlocking gas that might otherwise remain stranded.
Just as important, they show Nigeria’s ability to rethink commercial and regulatory structures when old methods reach their limits. By enabling flexibility, incentivising new suppliers, and positioning NNPC as an integrator rather than a gatekeeper, the agreements send a clear signal that Nigeria is serious about gas. This is the kind of institutional creativity that can strengthen the sector and set an example for other parts of the energy value chain
Yet the real test lies ahead. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) warned in October 2024 that Nigeria could face a gas supply shortfall of 3.1 billion standard cubic feet per day (bscf/d) by 2030, with demand projected to grow at an average of 16.6% annually between 2020 and 2030.
Against this backdrop, one must ask whether these long-term GSAs will be enough to bridge the looming supply gap, or will deeper upstream investments still be required to secure Nigeria’s energy future?
