FLNG: Nigeria, other African countries set to lead market

As the market is set for new capacity, Nigeria and other African countries are ready for a boom in floating liquified natural gas (FLNG).

According to a new report by Wood Mackenzie, the development would specifically enable Nigeria to monetise its stranded offshore gas resources.

The current challenges facing Nigeria LNG Limited had caused the Nigeria’s revenues from LNG exports to declined in the first quarter of 2023 to the lowest in five quarters as security, especially theft, resulted in a drastic drop in associated natural gas production at oilfields.

The data from the National Bureau of Statistics (NBS) showed Nigeria’s earnings from liquefied natural gas exports went down by 18 per cent between January and March this year when compared to the third quarter of 2022 and stood at $1.3 billion (622 billion Nigerian naira).

In July this year, Nigerian National Petroleum Company (NNPC) Limited with UTM Offshore has signed a deal for the construction of what is claimed to be the country’s first indigenous floating LNG (FLNG) project.

It was disclosed by the ‘Global FLNG Overview 2023’ of Wood Mackenzie that 8.5 million tonnes per annum (mmtpa) of FLNG capacity was sanctioned in 2022 making it clear that after several years in the project doldrums, investor interest in floating is back.

Senior Gas Research Analyst at Wood Mackenzie, Fraser Carson also noted that, “There are 12.5 mmtpa of FLNG projects currently under construction and by 2026, almost 25 mmtpa of floating supply will be operational. With international oil companies (IOCs), upstream producers and midstream specialists all moving projects towards final investment decisions that could push capacity even higher by 2030.

"FLNG is proving to be a reliable commercialisation option, adding that the utilisation of FLNG facilities in Cameroon and Malaysia has been strong over the last year, with the units producing at close to or above 100 per cent of available capacity.”

In the report, Africa is the centre of the current boom in FLNG projects as several resource-rich countries look for solutions that would allow them the option of exporting any gas not utilised on their respective domestic markets.

The report also noted that within the last year, experienced FLNG developers Eni and Perenco have sanctioned a two-phase floating development in Congo and a barge-based project in Gabon, respectively.