NLNG: 35 Years of Nigeria’s Gas Success Story

As Nigeria flagged various initiatives for gas commercialisation and utilisation, ADEOLA YUSUF digs deep on the critical role the Nigerian Liquified Natural Gas (NLNG) has played in moving the country forward in the last 35 years of the company’s existence.


So many key interventions initiatives and private sector partnerships in the recent times have given a major boost to Nigeria’s gas commercialisation and utilization efforts.

However, according to the Natural Resource Government Institute, NRGI, meeting Nigeria’s domestic energy needs remains one of the most significant barriers to sustainable development and economic growth in the country.

Enter The NLNG

Nigeria LNG Limited is a joint venture incorporated in 1989 to produce LNG and natural gas liquids for export. This singular effort has tremendously helped Nigeria in its gas Commercialisation effort.

The NLNG was Nigeria’s first LNG project. Shell holds a 25.6% share, together with NNPC (49%), Total (15%) and ENI (10.4%).

The NLNG plant at Bonny Island has six processing units (trains) with total processing capacity of 22 million tonnes a year of LNG and up to 5 milliontonnes of natural gas liquids (LPG and condensate)

NLNG accounts for approximately 7% of the world’s total LNG supply, and it supplies power to more than 200,000 residents and businesses on Bonny Island via a rural electrification scheme.

Gap NLNG has come to fill

Only half of Nigeria’s 200 million citizens currently have access to energy, and with the population set to double by 2050, universal access is a huge challenge.

The government has sustained efforts to ramp up gas production, utilization and export, with the aims of supporting industrialization, boosting domestic energy supply (for power, cooking and transport), and increasing government revenues.

This, with activities of NLNG, would certainly enhance economic activity, thus improving the lives of the half of the population living in extreme poverty.

Whether ramping up gas utilization is feasible, or indeed the appropriate approach to achieving Nigeria’s energy supply and economic ambitions, is uncertain. What is certain is that global pressure to transition away to cleaner energies and defund fossil fuel projects and complicates the process of realizing that goal and could lead to wasted investments that jeopardize the economic and energy security of Nigerians in the future.

Moving Nigeria Forward: 35 Years Journey of NLNG

The Nigeria Liquefied Natural Gas (NLNG) has thirty-five years history of moving Nigeria forward through natural gas which has now becomes the country’s main stay. It is one of the leading gas producing countries in the world and deserves spotlight for its uncommon feat.

NLNG success stories in the country’s economic environment, is visible for discerning minds and understood by stakeholders who had followed its trajectory since its inception.

Incorporated as a limited liability company under the laws of the Federal Republic of Nigeria on May 17, 1989 to harness Nigeria’s vast natural gas resources and produce Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs) for national income, the company’s humble beginning started 10 years when the first cargo of Liquefied Natural Gas (LNG) was loaded for delivery to Montour Terminal in France, NLNG.

It has since maintained its reputation as a safe, reliable, responsible and trusted supplier of LNG and Natural Gas Liquids (NGLs) worldwide and thus puts the country in global map.

Its high-flying impacts in the global LNG market is boosted by the company’s shared core values of safety, integrity, teamwork, respect, excellence and caring for people, which NLNG explains,
underpin all the work it does and the foundation of its business principles.

With assets worth about USD17.5 billion with 51% stake by international oil companies and 49 per cent belonging to the country through the Nigerian National Petroleum Company Limited (NNPC),the company impacts in Nigeria’s growth

Over the years, the company paid dividends of about USD18 billion to the Federal Government of Nigeria courtesy of its shareholding in the company, through Nigerian National Petroleum Company Limited, NNPC.

It’s also noteworthy that the company has paid about USD9 billion in taxes to the Federal Government of Nigeria. It also contributes to national wealth and the economic wellbeing of states in which it operates, by paying all applicable taxes and tariffs.

While payment to the Federal Government of Nigeria through its shareholding in Nigerian National Petroleum Company Limited, NNPC, for feed gas from inception till date is about USD15 billion, he company generated considerable Foreign Direct Investment (FDI) for the country, with its plant construction.

Interestingly, since 2008, the company has contributed about four per cent of Nigeria’s annual Gross Domestic Product (GDP). With rebasing of the GDP in 2014, NLNG’s contribution to the GDP is estimated at about one per cent.

It provided more than 12,000 jobs at the peak of construction of each plant. Overall, the major sub-contractors employed over 18,000 Nigerians in technical jobs in the Base Project (Trains 1 and 2).

Empowerment And Employment

Through each Nigerian Content plan for its contracts, NLNG has promoted the development and employment of Nigerian manpower thus helping to nip the spiraling level of unemployment in Nigeria in the bud.

For instance, over 12,000 direct jobs were generated during the construction phase of Train 7, which is expected to double or triple after the construction of the plant.

​​Over the years, the NLNG has supported the development of community and Nigerian contractors to enhance their capacities and capabilities thereby enabling them to achieve standards of excellence.

Through the initiative to empower local contractors via the Finima Legacy Project, the company said indigenous contractors have made capital investments in their companies thereby expanding their operating capacity.

A senior official of the company said the capabilities of local vendors have also been developed through mentoring and partnerships between more established Nigerian vendors and community vendors.

According to the company, the Nigerian Content commitment in the acquisition of six new technology DFDE ships by NLNG’s subsidiary, Bonny Gas Transport, led to major achievements such as a feasibility study for the establishment of a drydocking and ship-repair yard in Nigeria, the training and development of Nigerians (both in Nigeria and Korea) in various aspects of ship design and construction, and export of Nigerian goods for use in construction of BGT ships in South Korea.

For Train 7, 55% of both engineering activities and procurement will be carried out in Nigeria and by Nigerian vendors.

With the incorporation of its first subsidiary, Bonny Gas Transport (BGT), in 1989, the LNG shipping industry in Nigeria was born. Currently, NLNG, through NLNG Ship Management Limited (NSML), another of its subsidiaries, is the biggest employer of Nigerian seafarers on board its 13 BGT-owned ships

The company has trained hundreds of sea-going officers, some to the level of captains and chief engineers.

In recognition of funding as the bane of the Nigerian manufacturing industry, NLNG, in 2013 launched the USD1 billion NLNG Local Vendors Finance Scheme (NLVFS).This was increased to USD1.2 billion in June 2017 with the introduction of an additional participating bank to the scheme making a total of six participating banks.

The company explained that the scheme facilitates access to funds from six participating banks to NLNG-registered vendors (suppliers of goods or contractors of services). Under the scheme, vendors are able to get quicker access to finance at fairer terms for their NLNG related business operations by leveraging on NLNG’s relationships with the banks.

Little wonder, the Nigerian Content Development and Monitoring Board, NCDMB, has commended the Nigeria LNG Limited over what it described as remarkable success at promoting Nigerian Content in the country.

Its former Executive Secretary of the NCMDB, Engr. Simbi Wabote, gave the commendation at the Nigerian Content Stakeholders Retreat in Bonny, Rivers State, hosted by NLNG, in demonstration of its unwavering commitment to the advancement of local content in Nigeria.

He lauded the NLNG for its remarkable success at promoting Nigerian Content, recalling that at the inception, the company’s management level had 90 per cent expatriates and 10 per cent Nigerians.

He added: “However, the table has now turned the other way, with the entire Management now consisting of Nigerians” he added.

​The Nigeria LNG Limited has helped to protect the environment from the effects of gas flaring and contributed to the reduction of gas flaring in Nigeria from 65 to about 20%.

The company is also protecting the environment by the significant reduction in felling of trees for use as fuels.

Additionally, NLNG has contributed to a healthier nation by encouraging the use of cleaner energy through its domestic LPG supply programme which has also resulted in reduced expenditure on respiratory health issues.

NLNG Shipping and Marine Services Limited (NSML)

Last year, NLNG Shipping and Marine Services Limited (NSML) have launched its Clean Water Initiative, a programme to raise awareness of the dangers of plastic pollution and to advocate for action to address the issue.

The Chief Executive Officer of NSML, Mr. Abdulkadir Ahmed, noted the detrimental effects of the plastic crisis on economic activities, human health, and the environment.

For over a decade, NLNG’s intervention in the supply of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas, to the domestic market under the NLNG Domestic LPG (DLPG) Scheme has helped reduce the use of dirty fuel sources for cooking.

Besides, it has stimulated growth in the industry by guaranteeing LPG supply, availability, affordability and enabling the development of a value network for a sustainable ecosystem towards a better Nigeria.

NLNG cumulatively supplied over 1,452kt of LPG to the domestic market, spurring a steady rise in annual domestic consumption in a market that was below 50kt per annum in 2007 to over 600kt per annum in 2018. To ensure steady supply of products, deliveries are made through NLNG’s dedicated vessel chartered for the DLPG Scheme.

Its DLPG market deepening strategy yielded some further dividends with the commencement of deliveries to Stockgap Terminal in Port Harcourt, as part of deliberate moves to encourage growth of the sector beyond Lagos and reduce the impact of congestion of the Lagos ports on deliveries into the market.

NLNG has committed to delivering 100% of its LPG production​ to the domestic market through Nigerian companies with whom it has signed Sales and Purchase Agreements (SPAs).

Last year, NLNG said it supplied 493,000 metric tons of LPG to the domestic market. In the preceding years, NLNG delivered 498,000 metric tons in 2022 and 399,000 in 2021.

Currently, NLNG caters for 30% of the total LPG demand in the country which is currently estimated to be about 1.5 million metric tons.

The company maintains a firm commitment to supplying LPG to the domestic market.

The company remains focused on promoting increased gas utilisation within the country and raising awareness about the use of clean gas for cooking to mitigate health risks associated with firewood usage.

Pursuant to its role in the LPG sector, facilitating the entry of more stakeholders into the LPG value chain and encouraging investments in infrastructure development to bolster sectoral growth.

This has contributed to the creation of additional employment and business opportunities in Nigeria.

​​The company’s CSR initiatives chiefly involve sponsorship in sports, beautification of roads, giving donations and project implementations. Some of these projects include provision of borehole water, youth empowerment, schools and healthcare centres for the communities.

NLNG has three main levels of scholarship schemes: Post Primary, Under-Graduate and Post Graduate to encourage academic excellence and support human capital development in Nigeria, through which it added value in the last 35 years.

The University Support Programme, launched in 2014, is part of NLNG’s commitment to develop education and complement government and stakeholders’ efforts.

It spent about USD12 million (amounting to USD2 million per university) to build modern engineering laboratories and/or furnish them with cutting edge engineering equipment to aid teaching and research in six universities across Nigeria’s six geopolitical zones.

The company awarded full scholarships to 10 Nigerian youths for their postgraduate studies abroad.

The beneficiaries were awarded the 2022 scholarship to further their education at two prestigious universities in the United Kingdom, the University of Aberdeen and Cranfield University, Scotland.​

The awardees, seven males and three females, will specialise in mechanical engineering, sustainability transition, oil and gas law, environmental energy, data science, renewable energy, global health and management, and international business management.

Nigeria LNG Limited sponsors three of the biggest and most prestigious prizes in Africa for science, literature, and literary criticism: The Nigeria Prize for Science and The Nigeria Prize for Literature, each worth USD100,000 in award money, and The Nigeria Prize for Literary Criticism with a N1 million cash reward.

The Nigeria Prize for Literature and The Nigeria Prize for Literary Criticism are aimed at bringing Nigerian authors and literary critics to public attention and celebrating literary craftsmanship in the nation.

In the last 20 years, the company has boosted the literary terrain with quality participation of the writers and value addition to Literature in the country.

The Bonny Community Health Insurance Programme is a community-based health insurance initiative that is geared towards providing access to affordable, sustainable, and quality healthcare services without beneficiaries making out of pocket expenses when accessing medical care.

NLNG launched Youth Empowerment Scheme (YES) in 2004 as a sustainable development initiative aimed at youths (18-35 years old) within NLNG’s host communities.

YES is designed to make the participating youths economically and socially responsible and self-reliant through guided technical and managerial development training, and today, the initiative has grown exponentially

NLNG has committed to providing 50% (N60 billion), with the balance contributed by the Federal Government. Tagged the biggest CSR initiative by a private company in Nigeria, the 34 kilometre road passing through Bodo, Afa, Opobo and Nanabie to Bonny is expected to contribute significantly to the long-term goals of the Federal Government with respect to the development of the Niger Delta region.

Nigeria LNG Limited has further built ultramodern health centres, provided hospital equipment, and, in some cases, also installed electricity transformers. It has built several kilometres of roads and many schools in several communities in Rivers State and promoted social interaction among communities. These are in addition to renovation of schools and town halls and sinking of water boreholes.

Since its inception in 1989, the company also won awards and commendations within and outside Nigeria, in recognition of its quality service in the industry.

For instance, the Nigeria Employers’ Consultative Association (NECA) conferred Nigeria LNG Limited (NLNG) the Investment in Societal Renewal and Corporate Social Responsibility (CSR) Award, recognising the Company’s unparalleled commitment to CSR initiatives in Nigeria.

The company also won the “Local Content Company of the Year 2022” award at the ongoing 2023 Nigeria International Energy Summit (NIES) in Abuja.

It further bagged the “Gas Infrastructure Project of the year 2022” award for its Train 7 Project.

The company was recognised by the Federal Inland Revenue Service (FIRS) as its most Supportive Tax Payer.

It won the ‘Most Outstanding Contributor’ award in the natural gas industry at the 2020 World LNG Virtual Summit and Award.

The recent commendation of the gas company by President Tinubu, for its steadfast commitment to excellence and immense contributions to the GDP, acknowledging the critical role the Company plays in Nigeria’s economy gave credence to NLNG as the growth engine of the country in the last 35years.

In recognition of the company’s preeminent role, the President mince no words in assuring the NLNG Board that all encumbrances to the progress and development of Nigeria’s industrial citizens as well as any further impediment to the business practice in the oil and gas sector would be swiftly removed.

The drivers of the company’s commercial focus are desirous of continually repositioning it for competitive edge and to ensure optimal incremental value and business growth”, leveraging a range of strategic portfolio management and optimisation mechanisms including cargo diversions, swaps, SPA reviews for value, etc in spite of the helping hands it has given to Nigeria since its birth.

Chairman, NLNG Board, HRM King Edmund Daukoru, CON, who acknowledged the crucial role NLNG has played in Nigeria’s economy, maintained that NLNG will continue to consolidate its position as not only one of the major and reliable suppliers of LNG in the world, but equally a flexible and value-driven LNG supplier.

The company ambitious project, Train 7, also excited Daukoru, who indeed believes, will deepened NLNG’s global recognition when completed.

He said:”Following the Final Investme​nt Decision and the award and signing of Engineering, Procurement and Construction (EPC) contracts for Train 7, the next few years will be very challenging for NLNG as it works to safely deliver a new world class expansion within the context of a rapidly changing global energy landscape’

Last Line

​​At 35, the NLNG says it is waxing stronger, better and will continue to help build ​a better Nigeria by supplying products to the country, including exploring domestic LNG supply opportunities as a potential way of helping to bridge the energy gap, specifically supporting the power sector.

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