Repositioning Nigeria's Gas Market in a Dynamic LNG Landscape: Challenges, Opportunities, and Strategic Solutions

Abstract This paper investigates the global trend of the liquefied natural gas (LNG) industry, focusing on Nigeria's opportunities and challenges in expanding its LNG infrastructure and competing globally. Natural gas and LNG development are important components of a cleaner energy future that can enable a nation's economic development and attract investments through its abundant resources. This has led to skyrocketing demand for liquefied natural gas (LNG), which enables the transport of gas from regions where the resource is abundant to regions where the resource is inaccessible. Over the past decade, natural gas demand has quadrupled, and LNG has exhibited remarkable long-term expansion. According to the International Gas Union report (IGU, 2024), the global natural gas trade expanded by 2.1% between 2022 and 2023, to approximately 401.42 million tonnes (MT), connecting 20 exporting markets and 51 importing markets. This growth is driven by substantial increases in LNG production and liquefaction capacity of major exporters such as the United States, with 91.4 MTPA (million tonnes per annum), followed by Australia with a liquefaction capacity of 87.6 MTPA, and Qatar with 77.1 MTPA. Also, the discovery of significant offshore natural gas reserves in Mozambique and Tanzania has redirected international attention to large-scale LNG export projects, prompting concerns about asset stranding in Nigeria amidst increasingly saturated global LNG markets. Research also reveals that despite Nigeria's substantial 209 TCF natural gas reserves and ranking as the world's sixth-largest LNG exporter with a 22 million-tonne annual production capacity, it struggles with significant obstacles. These challenges encompass insufficient feedstock gas volumes, underdeveloped infrastructure, and upstream disruptions, leading to a notable 13% export decline. Therefore, utilizing a comprehensive literature review and case studies from industry reports, this study thematically examines key barriers and pinpoints strategic opportunities for enhancing Nigeria's competitiveness in the global LNG market. This paper also provides valuable insights and recommendations for diversification strategies, such as introducing small-scale LNG for domestic and regional markets, expanding LNG infrastructure, and effectively managing gas resources, especially given Nigeria's strategic focus on gas development.