About 100Million Tonnes Per Annum (mtpa) of new LNG supply is expected to enter the international market from Nigeria, Qatar, the US, and Canada between 2026 and 2028, even as Shell has just sanctioned the development of Crux gas field in Australia’s Bonaparte Basin.
The Nigeria LNG Train 7 Project which will increase the production capacity of the company by 35% from the current 22 Million Tonnes Per Annum (mtpa) to 30mtpa is expected to be completed within this time frame
This expansion will ensure that Nigeria, with its significant gas reserves (202 tcf of proven gas reserves, the 9th largest in the world) remains a top, reliable and preferred supplier of LNG in the ever-expanding energy world.
On 27th December 2019, NLNG’s Shareholders took Final Investment Decision (FID) for the Project and on 13th May 2020 awarded the Engineering, Procurement and Construction (EPC) Contracts for the Project to SCD JV Consortium, comprising affiliates of Saipem, Chiyoda and Daewoo.
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On 15th June 2021, the President of the Federal Republic of Nigeria, Muhammadu Buhari, GCFR, flagged off the construction of Nigeria LNG Limited’s (NLNG) Train 7 project during the groundbreaking ceremony at the Company’s plant site on Bonny Island, Rivers State.
According to Wood Mackenzie research analyst Michael Song said: “The development of Crux gas field is expected to cost US$2.5 billion, and will produce 1.6 tcf gas, 60 mmbbl of condensate and 40 mmbbl of LPG. Crux will be produced through an unmanned platform tied back to the 3.6 mmtpa Prelude FLNG facility.
“Crux has long been the leading candidate for providing new supply for Prelude FLNG. It has been a case of when rather than if the project would reach sanction, as the volumes are needed to ensure the FLNG facility produces at nameplate capacity into the 2030s.
“A significant portion of the LNG will be lifted into Shell’s global portfolio. These volumes will supply growing Asian LNG demand, in support of coal-to-gas switching and lower carbon emissions.
“With future supply secured, Prelude partners must ensure there are no further technical issues onboard the vessel and maintain stable production to take advantage of current LNG prices. First gas is targeted for 2027, which should be achievable given the small-scale upstream development.
“In a global context, Crux is an example of the type of incremental, shorter-cycle, high-return development that the industry is targeting as it maintains capital discipline despite strengthening commodity prices. That being said, the volumes will enter the market at a time when we see significant new supply ramping up. Across 2026-8 we expect more than 100 mmtpa of new LNG supply to enter the market from Qatar, the US, Nigeria and Canada.”
Wood Mackenzie research director Andrew Harwood said: “In maintaining output from the Prelude facility, Crux will support Shell’s belief in LNG’s key role in the energy transition. Shell is also making substantial investments in its Renewables and Energy Solutions business in Australia, as it seeks to diversify away from its legacy oil and gas business.”
