Bracewell Partner Adam Blythe recently discussed with Energy Voice’s Ed Reed the Nigerian gas market and the infrastructure projects needed to move supply.
Nigerian Minister of State for Petroleum Resources Timipre Sylva has designated 2020 as the “year of gas,” which began with the final investment decision (FID) on Train 7 at the Nigeria LNG (NLNG) plant.
The country has abundant supplies of gas, but lacks the required infrastructure to move the feedstock to where it could be used, Blythe commented. “Developing that gas infrastructure can be costly and there are significant funding constraints on midstream developers,” he continued, saying risks in the sector were connected to difficulties in securing robust offtake deals.
“For example, a key potential user of gas should be the country’s power industry, but this remains under-developed and the privatisation process carried out in 2012 has largely been perceived as unsuccessful and suffered from serious structural deficiencies – and left gas producers exposed to significant offtaker payment risk with little credit security – with no plans to repeat this,” Blythe told Energy Voice.