NLNG’s plan to sell liquefied gas locally opens opportunity for investors

The first molecule of domestic liquefied natural gas from Nigeria LNG Limited is billed to come into the Nigerian market by July 2022 heralding what could become a million-dollar investment opportunity in the gas sector.

On the back of this plan, investors can find opportunities in shipping, regasification infrastructure construction, offtaking the gas, construction of terminals, even tracking, and insuring the gas in transit.

A Nigerian shipping entity can leverage the Cabotage Act to ship LNG from the company’s Bonny plant to ports around the country. Nigeria’s Cabotage Act restricts the use of foreign vessels in domestic coastal trade to promote local participation.

LNG can be shipped either on Delivered Ex Ship (DES) or Free On Board (FOB) basis. Under the DES, the seller delivers the goods to a buyer at an agreed port of arrival but under the FOB contract, the buyer or his agent handles shipment.

Before the recent spike in gas prices, the cost of shipping LNG was usually charged around $1 per million British thermal units (mmBtu), shipping thousands of LNG volumes could become a million-dollar business.