LNG’s new impetus

What are the main advantages of mini-LNG plants?
Over the last two years, there has been a significant evolution in global energy dynamics with profound implications for natural gas. More recently, the war between Russia and Ukraine has accentuated the crisis in global energy with even more consequences for natural gas. As a result, we can expect LNG penetration to accelerate globally, as many players need to diversify their supply sources.
Small offtakers and manufacturers will feel the pressure the most and this creates a business case for mini-LNG plants. Small-scale LNG can get to market faster and can be anchored on simple bilateral deals. At GasInvest, we see this as a clear opportunity space and we are developing one such plant to serve both the regional market and Europe too.

What does the Riverside LNG project entail?
GasInvest Limited has set up an SPV called Riverside LNG. Riverside LNG is being set up as a small-scale LNG production and marketing company. It has an initial capacity to produce 700 tonnes per day of LNG, with scope to expand to 1,400 tonnes per day in subsequent phases.
Riverside will serve the domestic, coastal regional and European markets when completed. Domestically, we will be serving industrial clusters that are not connected to pipeline infrastructure. We will be investing in 30-40 trucks to move the LNG. Good progress is being made with a view to attaining the final investment decision by the end of 2022. The plant is modular and should be installed in time for first gas by early 2024.

How is GasInvest planning to enter the marine sector?
The maritime industry is one of the biggest polluters in terms of GHG emissions. The offshore oil and gas industry employs a significant amount of offshore supply vessels and security vessels, all of which burn a lot of diesel, with the resulting pollution. All IOCs and NNPC are committed to lowering their carbon footprint aggressively across their entire value chain. By moving a significant number of offshore vessels to gas-fired vessels, the operators can achieve major progress in their drive to reduce their carbon footprints.
Riverside LNG intends to introduce LNG bunkering into the Nigerian marine sector. We are working with our partners, Norgas, a Norwegian marine company, to introduce LNG bunkering as well as offer offshore supply vessels that run on LNG to the Nigerian oil industry. Our offering is all inclusive, end-to-end as Riverside is able to produce and provide the LNG as well as the bunkering service, plus provide some ships that run on LNG. We believe this will be a great contribution to Nigeria’s carbon footprint reduction agenda.
As the service gets established, it will encourage other third-party commercial vessels running on LNG to consider Nigeria as a credible LNG bunkering location. GasInvest wants to create monetary value and real developmental socioeconomic value by making an impact on the country as a whole.

How would you evaluate the competitiveness of the Nigerian LNG bunkering sector?
In Nigeria, all of the vessels are running on diesel, and most of them are more than 20 years old with old-fashioned engines. The potential for LNG bunkering is therefore immense because nobody else is currently providing LNG bunkering or LNG vessels. The demand is present and active. To unlock its potential, we need the regulators to provide a proper roadmap on how they plan to decarbonise the marine sector.
We need an enabling policy environment to get a critical mass of vessels ready and introduced into the Nigerian marine environment. The regulator needs to introduce policies and guidelines that will enable an orderly transition over time from the current fleet to the more environmentally friendly LNG fleet.
Education and collaboration from every stakeholder will foster faster and more universal LNG penetration. The potential for Nigeria is enormous because we could be one of the first countries in the region to provide such services. There is a concrete opportunity to become a regional hub for LNG bunkering.

What should be the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s prerogatives for the development of the Nigerian energy industry?
The two new regulators should focus on making the gas market competitive along the entire value chain. On the upstream side, we need to encourage investments by guiding investors through the new fiscal frameworks that the Petroleum Industry Act has provided.
In the downstream sector, we need to address issues that stagnate the development of a fully liberalised and competitive gas market. This means pricing, contractual frameworks, licensing for various market operators that can help stimulate liquidity and reduce the complex gas contracting processes, etc. We need to get to a point where gas can be procured almost as easily as gasoline without the onerous contract terms that are fast becoming a barrier to entry of the gas market.

How would you assess the CNG market penetration in Nigeria?
The CNG segment has been the fastest-growing segment in recent years. Small consumers are scattered around the country, and it will take quite some time to develop gas pipelines that will reach all of them. A virtual CNG scheme represents the flexibility needed to reach remote consumers. The main problem with CNG is that it tends to get more expensive over long distances; that is why it is recommended to use LNG for longer distances.

What are GasInvest’s main contracts?
GasInvest’s strategy is to work with governments to develop policies and roadmaps related to gas. We are advisers of the government of Equatorial Guinea on gas supply from Nigeria. We are also helping the Lagos state government develop their gas policy for the entire Lagos State, which is almost the biggest economy in Africa. GasInvest is also trying to develop an electronic gas trading platform for Nigeria. This should provide an alternative platform for people to access gas, albeit on a spot basis with less stringent terms and conditions. It will complement the more prevalent bilateral gas contracting but should help enable market liquidity.
On the asset management side, GasInvest is also working on various gas pipeline management services. For example, we just participated in erosion control works on one of the nation’s major gas pipelines.

Where do you see GasInvest in the next 24 months?
In the next 24 months, we hope to be at the heart of the regional gas sector. Through a vibrant trading platform, we hope to be able to connect markets domestically and regionally. And with our LNG business, we hope to extend our footprints even farther afield. Our aspiration is to connect as closely as possible to end markets for gas in Nigeria, Africa and potentially Europe.