Syntheda

Nigeria stands at a pivotal juncture as the global liquefied natural gas market enters a period of unprecedented expansion, with industry forecasts projecting substantial capacity additions between 2026 and 2030. The West African nation, which holds Africa's largest proven natural gas reserves at approximately 209 trillion cubic feet, has historically underperformed in monetizing these resources despite operating the Nigeria LNG Limited facility on Bonny Island since 1999.

According to analysis published in Business Day, the coming surge in global LNG production presents Nigeria with a critical opportunity to reposition itself within the international gas market. The International Energy Agency projects global LNG trade will expand by approximately 50% by 2030, driven primarily by Asian demand and the transition away from coal-fired power generation in developing economies. This expansion creates a window for Nigeria to capture market share, particularly as European nations seek to diversify supply sources following geopolitical disruptions to pipeline gas imports.

Nigeria's current LNG export capacity stands at 22 million tonnes per annum through the six-train NLNG facility, a figure that has remained static since Train 6 came online in 2007. The long-delayed Train 7 project, with a planned capacity of 8 million tonnes per annum and an estimated capital expenditure of $10 billion, represents the nation's primary vehicle for participating in the anticipated market expansion. Final investment decision for Train 7 was approved in 2019, yet engineering, procurement, and construction activities have progressed slowly, raising concerns about Nigeria's ability to bring new capacity online during the optimal market window.

"The overall purpose of this article is to draw attention once again to the global surge in liquefied natural gas," Business Day noted in its February 2026 analysis, emphasizing the time-sensitive nature of the opportunity. The publication highlighted that competing projects in Qatar, the United States, and Mozambique are advancing rapidly, with Qatar's North Field expansion alone expected to add 49 million tonnes per annum of capacity by 2027-2028. These developments threaten to saturate the market before Nigerian projects can achieve commercial operation.

The financial implications extend beyond direct LNG revenues. Nigeria currently flares approximately 7.4 billion cubic meters of associated gas annually, representing both environmental damage and lost economic value estimated at over $1 billion per year. Expanding gas processing and liquefaction infrastructure would enable greater capture of associated gas from oil operations, reducing flaring penalties under the Nigerian Gas Flare Commercialization Programme while generating additional export revenue and domestic power generation feedstock.

Regulatory and fiscal challenges continue to impede progress. The Petroleum Industry Act of 2021 established new fiscal terms for gas projects, including a 0% royalty for the first five years of non-associated gas production and corporate income tax rates of 30% for upstream gas operations. However, implementation has been inconsistent, and investors cite regulatory uncertainty around gas pricing, domestic supply obligations, and foreign exchange access as persistent barriers to final investment decisions on new projects.

Infrastructure constraints compound these challenges. Nigeria's domestic gas pipeline network remains incomplete, with the Ajaokuta-Kaduna-Kano pipeline project experiencing repeated delays. The lack of integrated transmission infrastructure limits the ability to aggregate gas from dispersed fields for processing and export, reducing the commercial viability of smaller discoveries that could otherwise contribute to national production volumes.

The competitive landscape has shifted considerably since Nigeria emerged as Africa's LNG pioneer in the 1990s. Mozambique's Coral South FLNG facility commenced production in 2022, with the onshore Mozambique LNG project targeting 12.88 million tonnes per annum once security conditions permit construction resumption. Tanzania is advancing the $30 billion Lake Tanganyika LNG project, while Mauritania and Senegal brought the 2.5 million tonne per annum Greater Tortue Ahmeyim facility online in 2024. These developments demonstrate that Nigeria no longer enjoys a continental monopoly on LNG export capacity.

Market analysts project that LNG spot prices, which averaged $13.50 per million British thermal units in Asian markets during 2025, could moderate to $9-11 per MMBtu by 2028-2030 as new supply enters the market. This price trajectory creates urgency for Nigeria to secure long-term offtake agreements at current pricing levels before the anticipated supply glut materializes. NLNG has traditionally marketed its cargoes under long-term contracts indexed to oil prices, providing revenue stability, but new capacity will enter a more competitive contracting environment.

The domestic dimension cannot be overlooked. Nigeria's power generation capacity remains constrained at approximately 12,500 MW for a population exceeding 220 million, with gas-to-power projects chronically undersupplied due to pipeline vandalism, payment defaults by distribution companies, and the prioritization of export markets over domestic consumption. Balancing export revenue maximization with domestic energy security requirements will require sophisticated policy coordination that has historically eluded Nigerian authorities.

Looking forward, Nigeria's ability to capitalize on the 2026-2030 LNG surge will depend on expediting Train 7 construction, resolving fiscal and regulatory uncertainties, and potentially attracting investment in additional liquefaction capacity beyond current plans. The window is narrowing as competing projects advance and market conditions evolve, making the next 24-36 months critical for determining whether Nigeria reclaims its position as Africa's preeminent gas exporter or cedes ground to emerging competitors across the continent.