Russia-EU Gas Debacle and Nigeria’s LNG Emerging Market, By Sina Olowookere

Nigeria has stepped in to help the EU as the bloc scrambles to find alternative energy suppliers to end dependence upon Vladimir Putin after the invasion of Ukraine.

The EU’s new energy strategy, published earlier this month, details how it will slash energy ties with Russia. The bloc plans to cut Russian oil and gas imports by two thirds by the end of the year and permanently part ways with Russia by 2030. But as the EU currently depends on Russia for 40 percent of its gas, 25 percent its oil imports and 46 percent of its coal, it sparked fears around its energy security.

The strategy involves encouraging boosted imports from alternative producers of liquified natural gas (LNG), such as the EU.

Now, Nigeria has stepped in to present itself as a new alternative.

In a meeting on Friday, March 25, with EU diplomats in Abuja, Nigerian Minister for Petroleum Resources, Timipre Sylva said that his country is ready to become an alternative gas supplier to the bloc.

Mr Sylva encouraged energy giants like Shell, Eni, and Total Energies, to ramp up investments in the Nigerian gas sector.

Nigeria is hoping to step in as an alternative gas supplier to the EU

40 percent of Europe’s gas is supplied by Russia

This also comes after Shell pulled out of Russian energy projects worth billions in response to Russia’s war in Ukraine.

Mr Slyva said: “We would like to be reliable partners to solve the energy problem in Europe and we can only achieve this by working together.

“It is only when investment in these areas is increased that Nigeria can meet that obligation.”

Data from 2015 shows that Nigeria produced over 3,000,000 million cubic feet (MMcf) of natural gas, making it the 12th largest producer in the world at that time.

Around 31 percent of that natural gas was exported to other countries which makes the EU to start scrambling for alternative suppliers to Putin

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As the EU is hoping to diversify gas sources as part of its new strategy, Nigeria has seen the opportunity.

But other countries are racing to sell energy to Europe too.

The US has said it will work to supply 15 billion cubic metres (bcm) LNG to EU markets this year.

Last week, a fact sheet released by the White House said the Commission will be working with EU member states to ensure they can receive about 50 bcm of additional LNG until at least 2030.

Also eager to take a slice of the pie is Algeria, which already sends significant volumes of gas to Spain, Italy, and Portugal.

Algeria, Niger, and Nigeria recently struck a deal to build the multi-billion, 4,128 km Trans-Saharan Gas Pipeline.

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It will run through the three countries into Europe, transport 30 billion cubic meters of gas per year once it comes online.

The three partners are scrambling to attract commercial investment in the project.

Mr Sylva slated the EU for previously ignoring Nigeria’s resources and slashing investments in fossil fuels.

He said: “One of the things we warned against earlier was the speed with which EU was taking away investments in fossil fuels.

“We warned that the speed was faster than they were developing renewable energy.

Borell revealed the EU has been in talks with LNG suppliers

“You can see now that what we were warning against is what is happening now.

 *Outline of the gas pipeline and reviving this tripartite project.*

Nigeria, others restart $13bn Trans-Saharan gas pipeline project

To avoid a near collapse of the Trans-Saharan gas pipeline project, Nigeria and other African countries have committed to reviving the project targeting gas supply to Europe.

Energy Ministers of Nigeria, Niger and Algeria signed the ‘Declaration of Niamey’ during the third edition of the Economic Communities of West African States (ECOWAS) Mining and Petroleum Forum (ECOMOF) in Niamey on February 16, 2022. The pipeline will enable Europe to tap directly into the three country’s significant natural gas reserves.

Endorsed by Chief Timipre Sylva, Nigeria’s Minister of State for Petroleum Resources, Mahamane Sani Mahamadou, Minister of Petroleum, Energy and Renewable Energies for the Republic of Niger and Mohamed Arkab, Minister of Energy and Mines, Algeria, the agreement will see the resumption of the Trans-Saharan Gas Pipeline project.

The gas pipeline of 4,128km will link Warri in Nigeria to Hassi R’Mel in Algeria, passing through Niger. Post completion, the pipeline will transport 30 billion cubic feet, bcm of natural gas yearly from Nigeria, Algeria and Niger to European markets via Algeria’s strategic Mediterranean coast, as well as supply inland stations along its route.

It will enable Europe to tap directly into the three country’s natural gas reserves, thus diversifying its supply in the wake of the current energy crisis, while creating critical sources of revenue for African gas markets.

Much of the estimated $13billion pipeline cost will be spent in Niger, acting as a much-needed boost for the already growing energy sector and wider economy. It will also enable Niger to monetise its own gas reserves, estimated at 34 bcm with recoverable reserves of 24 bcm.

Niger already has experience in driving transnational energy infrastructure projects. Its 2011 completed Zinder based 20,000 barrels per day (bpd) refinery supplies the entire region with petroleum products. Niger currently exports refined products to countries in the sub-region, including Nigeria, Mali, and Burkina Faso.

Through the completion in 2023 of the Niger-Benin pipeline, from the prolific Agadem basin in Niger to the Cotonou terminal off the coast of Benin, Niger will increase its current production from 20,000 to over 120,000 bpd.

This 2.2billion pipeline will unlock an additional $3bn in field development investments by Chinese major CNPC, which is the operator of the Agadem discoveries.

Niger aims to become a hub for hydrocarbons, petrochemicals and associated products in West Africa and the Trans-Saharan Pipeline projects only serves to enhance this trend. The planned energy infrastructures will boost Niger’s growth and position it as a key bridge between resource rich sub-Saharan Africa and the Maghrebian and European markets.