Gas
NLNG Enters a Gas Supply Deal with Seplat Energy
Nigeria LNG Limited (NLNG) and Seplat entered a gas supply deal on May 7. The agreement aims to boost NLNG’s feedstock by over 12%. The NLNG-Seplat gas deal comes as NLNG deals with unprecedented operational challenges due to pipeline vandalism.
NLNG’s gas supply has plunged by 80% due to continuous pipeline vandalism. As a result, only two of its six processing trains are operational.
This has led to a steep fall in LNG exports to NLNG’s Asian and European clients, raising concerns about Nigeria’s ability to meet its LNG export obligations.
Despite all these issues, NLNG is pushing ahead with its Train 7 project. The project aims to boost production capacity from 22 to 30 million tonnes annually.
As of June 2024, Train 7 had reached 67% completion. Nevertheless, for the Train 7 project to succeed, NLNG needs a stable feed gas supply through the GTS-1, GTS-2, and GTS-4 pipelines, the largest lines supplying gas to NLNG.
However, the constant vandalism of these pipelines means that NLNG receives limited feed gas from its JV suppliers (Shell, TotalEnergies and ENI).
Key Details of the NLNG-Seplat Gas Deal
The gas deal involves both NLNG and Seplat Energy. Nigeria LNG (NLNG) is the country’s largest LNG exporter. NNPC, the national oil company, holds 49%, while Shell owns 25.6%. TotalEnergies and ENI hold 15% and 10.4%, respectively. The supplier, Seplat Energy, Plc, is a leading Indigenous independent energy company.
Regarding gas supply volume, Seplat will supply over 150,000 metric tons of gas per month to NLNG’s Bonny plant. The gas will serve as a feedstock for NLNG to process into liquefied petroleum gas (LPG) for the domestic market and liquefied natural gas (LNG) for exports to clients in Asia and Europe.
On the supply start date, Seplat will commence gas deliveries in Q3-2025, pending the completion of all required commercial and technical details.
The exact duration of the NLNG-Seplat gas supply deal has not been publicly disclosed. However, the gas deal is a bridge agreement to plug the immediate feed gas supply gaps.
Regarding gas delivery, Seplat will supply gas through a new pipeline connecting Seplat’s ANOH gas plant to NLNG’s Bonny plant.
Strategic Objectives
The NLNG-Seplat gas supply deal will benefit both parties involved in the agreement.
For NLNG, gas supplies from Seplat will enable it to bridge its feedgas shortfalls caused by pipeline vandalism, crude theft, and low production outputs from suppliers (Shell, TotalEnergies, ENI, and Aradel).
By bridging the feed gas supply gap, NLNG’s six trains will operate at full capacity. This will enable the company to meet its export volume obligations to clients, enhancing its export reputation.
The gas deal also benefits Seplat Energy, enabling it to monetize its gas from the Assa North-Ohaji South (ANOH) gas processing plant. Consequently, gas supplies to NLNG would boost Seplat’s revenues which will enhance the company’s strategic profile in Nigeria’s gas sector and improve its investor perception.
| Benefit Type | NLNG | Seplat |
| Revenue Generation | Stable LNG exports to clients in Asia and Europe | Monetized its gas output processed at ANOH plant |
| Diversification | Less reliance on JV suppliers (TotalEnergies, Shell, ENI, and Aradel) | Less reliance on local gas demand & sales |
| Strategic Leverage | Greater control over feedstock | Access to LNG export value chain |
| National Policy Alignment | Supports “Decade of Gas” initiative | Supports ANOH gas investment case |
The NLNG-Seplat also benefits the federal government. The gas deal aligns with the government’s “Decade of Gas” initiative, established in 2021. The initiative aims to transform Nigeria from an oil-dependent to a gas-powered economy.
The core objects include boosting gas and LNG exports and expanding gas pipelines, processing plants, and storage. It also involves increasing the use of gas for electricity generation to power industries, manufacturing zones, and economic corridors.