Nigeria is on the brink of another spike in cooking gas prices as the Nigeria Liquefied Natural Gas (NLNG) faces an unprecedented supply crisis. The company’s operations at its Bonny Island facility have been severely impacted, with gas supply plummeting by 80%, drastically reducing its ability to meet both domestic and international demand.
Causes of the Supply Shortage
The primary driver of this disruption is persistent pipeline vandalism, which has crippled the delivery of natural gas to NLNG. According to industry sources, NLNG is currently operating at just one-fifth of its required supply, forcing it to run only two of its six production trains. This has significantly weakened its capacity to meet contractual obligations, leading to supply shortfalls in both local and international markets.
Impact on Global Energy Markets
The ripple effects of Nigeria’s LNG supply constraints extend beyond its borders. Europe and Asia, key importers of Nigerian LNG, are already feeling the pinch as supply tightens. In 2024 alone, nearly half of Nigeria’s LNG exports went to Asia, while a third were directed to Europe. Any further disruption could drive global spot prices higher, worsening the energy crisis in these regions.
Economic Consequences for Nigeria
The supply crunch poses serious financial risks for Nigeria. NLNG is a vital source of revenue for the country, generating billions in export earnings. With LNG exports already declining by 40% in February compared to the previous month, the country faces significant losses in foreign exchange revenue. Experts warn that continued attacks on gas infrastructure could derail the government’s expected dividend of N727 billion from NLNG by 2025.
Urgent Need for Energy Security
NLNG’s Managing Director, Philip Mshelbila, has stressed the urgency of securing gas pipelines, equating energy security with national security. While efforts have been made to protect oil infrastructure, the vulnerability of gas pipelines remains a major challenge. Without swift intervention, Nigeria risks further production losses, market instability, and economic setbacks.
Final Verdict
The ongoing crisis at NLNG highlights the pressing need for stronger security measures and infrastructure investments in Nigeria’s energy sector. As supply shortages continue to push up cooking gas prices, consumers and the broader economy will bear the brunt of the fallout. Addressing these challenges is critical to stabilizing the domestic market and maintaining Nigeria’s position as a global LNG exporter.
