Global Trend in Natural Gas Development and the Impact on the Nigerian Gas Market

Abstract

Abstract This paper takes a proper look at the current trend in Global gas development worldwide and the impact on the Nigerian Gas market. With the global gas demand set to rise above 50% between 2010 and 2035, reaching 25% of the world's energy mix, overtaking coal to become the second largest primary energy source after oil, it becomes highly imperative for gas producers to fully understand the dynamics of this growth trend. The boom in unconventional gas development in some countries of the world especially the United States who is currently a major destination of the Nigerian gas, is expected to become a net exporter by the year 2016, resulting in revenue loss from gas sales in Nigeria. The increased expansion of LNG facilities and hence production capacity in major gas producers like Australia and Qatar while growth in Nigeria has remained stagnant will affect the country's revenue from gas in the nearest future. Also, the new discoveries of large gas reserves in some countries in East Africa including Mozambique and Tanzania located in the Indian Ocean will reduce operating cost of LNG buyers in Asia when these two Nations's LNG projects come on stream in 2018, as compared to buying from Nigeria. This paper therefore takes a look at how these trends affect the Nigerian gas Market and suggests possible ways of avoiding revenue loss from gas sales in the nearest future.