Nigeria LNG Limited (NLNG) has entered into a third-party gas supply agreement with Seplat Energy in a strategic move to mitigate the adverse effects of persistent fuel theft and pipeline vandalism that have disrupted its operations.
The preliminary agreement, confirmed by Seplat Energy executives, is expected to increase NLNG’s monthly gas intake by over 12 percent.
Under the deal, Seplat will deliver more than 150,000 tons of gas per month to NLNG’s Bonny Island facility in Rivers State.
This volume exceeds NLNG’s average feedstock receipts over the last year and represents a vital supply-side recovery for the export-focused energy firm.
This development marks only the second time in NLNG’s operational history that it will procure feed gas from a third-party supplier.
NLNG, a joint venture involving the Nigerian government, Shell Plc, TotalEnergies SE and Eni SpA, has seen its production capacity constrained by a sharp decline in upstream gas deliveries resulting from widespread vandalism and theft across its pipeline network.
Effiong Okon, Managing Director of Seplat’s gas subsidiary overseeing the agreement, disclosed that both firms are finalizing technical and commercial terms.
He indicated that gas deliveries to NLNG are expected to commence by the third quarter of 2025, subject to regulatory and operational clearances.
“The agreement offers immediate relief to Nigeria LNG’s feedstock challenge while creating an offtake solution for Seplat’s growing gas portfolio,” Okon said.
Seplat’s gas output has surged by 50 percent following its acquisition of key assets from ExxonMobil’s Nigerian operations.
However, the company’s $700 million ANOH gas processing facility remains underutilised due to delays in the completion of the East-West pipeline, which was initially intended to transport its production.
The deal with NLNG provides Seplat with a short-term monetization pathway for ANOH’s output while enabling NLNG to stabilise its operations amid lingering infrastructure sabotage.
Seplat confirmed that the arrangement is temporary and will expire once the East-West pipeline becomes operational.
Energy sector analysts have praised the transaction as a practical solution to dual industry challenges.
Katlong Alex of the African Energy Council described it as a “strategic convergence of urgent need and supply capacity.” He noted that “NLNG gets a reliable gas stream while Seplat unlocks value from otherwise stranded production.”
As of press time, NLNG had not issued a formal statement regarding the deal. However, industry insiders suggest the agreement could influence broader gas supply reforms and incentivise more third-party arrangements in the future.
Nigeria, Africa’s top LNG exporter, is under increasing pressure to maintain domestic gas obligations while honouring international LNG contracts.
The NLNG-Seplat deal may provide the short-term capacity required to meet both commitments.
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