Nigeria LNG (NLNG)

Nigeria LNG Limited is the centrepiece of Nigeria's gas monetisation strategy and one of the most successful industrial ventures in the country's history. From a concept first discussed in the 1970s to a world-class LNG facility on Bonny Island, NLNG has transformed Nigeria into a major player in the global liquefied natural gas market.

History & Formation

The idea of an LNG project in Nigeria dates back to the 1960s and 1970s, when the government first recognised the vast volumes of natural gas being flared across the Niger Delta. However, it took decades of planning, feasibility studies, and negotiations before the project materialised.

Nigeria LNG Limited was formally incorporated on 17 May 1989 as a joint venture between the Nigerian National Petroleum Corporation (NNPC) and three international oil companies. The Final Investment Decision (FID) for the first two liquefaction trains was taken in 1995, and construction commenced shortly thereafter on Bonny Island in Rivers State.

The plant shipped its first cargo of LNG on 9 October 1999 - a landmark moment for Nigeria's gas industry. Within just a few years, NLNG rapidly expanded its capacity, adding four more trains between 2002 and 2007 to become one of the largest LNG operations in the world.

Shareholders

NLNG is a joint venture owned by four shareholders, with the Nigerian government holding the largest stake through NNPC. The partnership model has been widely regarded as one of the more successful public-private collaborations in Nigeria's extractive sector.

The Bonny Island Plant

The NLNG plant is located on Bonny Island in Rivers State, approximately 80 kilometres south-east of Port Harcourt. It is one of the largest integrated LNG facilities in Africa and among the largest in the world by number of liquefaction trains.

The plant currently operates six liquefaction trains with a combined installed capacity of approximately 22 million tonnes per annum (MTPA) of LNG. It also produces natural gas liquids (NGLs) - primarily liquefied petroleum gas (LPG) and condensate - which are sold separately.

LNG Markets & Sales

NLNG sells its LNG to buyers across the globe under a mix of long-term contracts and spot sales. Historically, the majority of NLNG's output was committed under long-term Sale and Purchase Agreements (SPAs) with European and Asian buyers.

Key markets include countries in Western Europe (Spain, France, Portugal, Turkey, and the United Kingdom), Asia (Japan, South Korea, India, and China), and increasingly the Americas. NLNG maintains a fleet of dedicated LNG carriers and also charters vessels to transport cargoes to regasification terminals worldwide.

Since commencing operations in 1999, NLNG has delivered over 6,000 LNG cargoes and earned Nigeria tens of billions of dollars in revenue. The company has paid substantial dividends to the Nigerian government through NNPC and contributed significantly to national foreign exchange earnings.

Train 7 Expansion

The Train 7 project is NLNG's long-anticipated seventh liquefaction train, designed to increase the plant's total capacity by approximately 8 MTPA - from 22 MTPA to 30 MTPA. The Final Investment Decision for Train 7 was taken in December 2019, after years of delays driven by fiscal terms, gas supply uncertainties, and the global LNG market downturn.

The project is being executed by a consortium of engineering firms, including Saipem, Daewoo Engineering & Construction, and Chiyoda Corporation. Train 7 will utilise the AP-X liquefaction technology, an evolution of the C3-MR process used in the existing trains, which delivers higher output per train.

When completed, Train 7 will reaffirm Nigeria's position among the world's top LNG exporters and provide additional revenue streams at a time when global demand for natural gas is rising, partly driven by the energy transition away from coal.

Economic Contribution

NLNG has made a substantial economic impact on Nigeria since operations began. The company has generated over USD 110 billion in revenue cumulatively, paid billions in taxes and dividends to the Nigerian government, and contributed to the development of Bonny Island and its surrounding communities.

Beyond direct financial returns, NLNG supports community development through the NLNG Community Development Fund, scholarships (the NLNG Prize for Science and the NLNG Prize for Literary Criticism are among Nigeria's most prestigious awards), and investments in health, education, and infrastructure in its host communities.

NLNG is also a major contributor to Nigeria's domestic LPG (cooking gas) supply, delivering cargoes of LPG to Nigerian ports and helping to reduce the country's dependence on firewood and kerosene for cooking.