Nigeria’s Ambitious Offshore Gas Mining Project Set to Make Waves in Global Energy Market
The African nation of Nigeria is making preparations for a significant foray into offshore gas mining, with an estimated cost of $5 billion. This ambitious move forms part of Nigeria’s strategic plan to utilise its extensive natural gas reserves and consolidate its position as a leading exporter of Liquefied Natural Gas (LNG) to global markets.
With an astonishing estimate of 203 trillion cubic feet of natural gas, Nigeria is taking all the necessary actions to enhance its presence in the global oil market. The monumental $5 billion Nigeria LNG Train 7 expansion project is a key element of the country’s efforts to increase processing capacity by 35 per cent, from 22 million tonnes to 30 million tonnes annually. This expansion will significantly bolster the country’s ability to export gas to the ever-growing demand in markets such as Europe.
In line with its aspirations, Nigeria is scheduled to host the Invest in African Energy 2024 forum in Paris on May 14-15 in order to showcase investment opportunities in deepwater exploration, gas monetization, and midstream infrastructure. The objective is to attract major international oil companies (IOCs) to invest in offshore projects and intensify their focus on gas infrastructure development in Nigeria.
Shell, one of the major IOCs, has expressed a strong interest in offshore gas mining in Nigeria by announcing plans to increase investments in deepwater exploration and allocate $1 billion over the next decade to strengthen the country’s gas supplies. Total Energies has also entered the fray by commencing production at the Offshore Gas Mining spot of Akpo West field offshore Nigeria, with Chevron scaling up investments in Nigeria’s deepwater space.
Additionally, Nigeria is mindful of the need to strengthen its gas infrastructure in order to fully exploit its potential. Gas monetization is emerging as a crucial strategy to address gas flaring, which reached about 275 million cubic feet per day in 2023. The country aims to use this flared gas to generate power, creating significant opportunities in gas-to-power infrastructure. Furthermore, major pipeline projects such as the Nigeria-Morocco and Ajaokuta-Kaduna-Kano (AKK) pipelines are underway to enhance both domestic and international gas transportation.
The Nigeria-Morocco pipeline, which spans 13 West African countries, is pivotal for Nigeria’s access to the European market and is awaiting a final investment decision. The AKK pipeline, on the other hand, aims to promote industrialization and drive job creation by enhancing domestic gas transportation, with an expected completion date in mid-2024.
As Nigeria propels its oil and gas sector towards greater prominence on the global stage, it aims to attract increased investments and pave the way for sustained growth in LNG exports. The country’s comprehensive approach to offshore gas mining not only demonstrates its commitment to the energy market but also underlines its potential to emerge as a major player in the global energy landscape. By harnessing its natural gas reserves, Nigeria is on track to make waves in the global energy market.
