Nigeria boasts the world’s ninth largest gas reserves – estimated at 187 trillion cubic feet (Tcf) – but produces only about 1.7 Tcf per year, most of which goes to Nigeria LNG Limited’s (NLNG) export plant on Bonny Island (Petroleum Economist, 19.07.2017).

Since production began in 1999, NLNG has been one of the fastest growing companies in the world. With six trains currently operational, NLNG’s gas plant in Finima, Bonny Island, in Rivers State, has a total processing capacity of 22 million tonnes of LNG a year, and up to 5 million tonnes of natural gas liquids (LPG and condensate) (NLNG, 24.07.2017). It is also estimated to contribute about 4% of Nigeria's Gross Domestic Product (GDP) (NLNG, 24.07.2017); and with plans to add a further two trains, NLNG could unlock three times as much gas as the country’s proven reserves (Daily Mail, 08.03.2017).

Yet, in the face of a constantly evolving global LNG environment, NLNG is facing its biggest challenge yet.

While NLNG currently has 16 long term LNG sale and purchase agreements (SPAs) with 10 buyers across the world, several of these SPAs are nearing expiration. More specifically, contracts for gas supplies from Trains 1, 2 and 3 – which produce a combined total of 9 million tonnes of LNG each year – are out of contract in 2022 (SweetCrudeReports, 12.04.2017).

In April 2017, it was revealed that NLNG had begun talks with potential new buyers on new contracts for gas supplies.

However, the global LNG market has evolved drastically since these SPAs were first signed, and Nigeria may struggle to secure similar lucrative long-term contracts with reliable partners.