New Telegraph

Nigeria To Begin Supply Of Gas To South Africa

Nigeria is set to kickstart the delivery of gas to South Africa for the first time in the history of trade relations between the two nations if talks between Nigeria-based gas production firm, Riverside LNG and its counterparts in South Africa go through.

Recalls that Riverside LNG had earlier this year signed a gas-export partnership agreement with Johannes Schuetze Energy Import AG of Germany and is now looking for deals on the continent, the Chief Executive Officer of the firm, David Ige, said in an interview with Bloomberg.

“We’d probably very early in the year close out another segment of the market, an off-take for South Africa,” Bloomberg quoted David Ige, the CEO of the Nigerian private energy firm, as saying in an interview.

Nigeria has Africa’s largest gas reserves, as the country has about 206 trillion cubic feet of gas reserves, making it a nation with more gas reserves than oil.

“There’s a massively evolving gas market in the region, anything around 3,000 nautical miles of Nigeria. So that covers southern Africa, western Africa, all to northwest Europe and to the Caribbean and South America broadly.”

In November, Riverside LNG signed a pact with Johannes Scheutze Energy Import AG in Germany regarding renewable energy and a gas export deal worth $500 million.

Nigeria is in a drive to rev up foreign interest in its oil and gas industry, constrained for years by multiple issues from crude theft and pipeline vandalism to ageing infrastructure and structural bottlenecks, all of which account for why international oil companies exit in droves.


New measures and incentives to entice investors and reduce barriers to entry to improve the cost of doing business are among the government’s top agenda to drive production and boost revenue.

That involves a recent inclusion of signature bonuses, the fees it takes from new investors after signing contracts, in the lump sum that oil & gas companies pay on production.

South Africa needs to build a plant first to enable it to take liquefied natural gas from Riverside LNG, implying that supply will only begin in 2027. That means there’s “enough time for import terminal infrastructure,” the Riverside LNG CEO said.

The initiative could help South Africa in tackling a sticky electricity problem.

The country is in the middle of a profound power crisis as Eskom, the state-owned electric utility, reels from the strain of old infrastructure, forcing the company to resort to load-shedding that often triggers blackouts across the country in a big blow to economic activities.

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