Nigeria LNG Signs 20-Year Gas Supply Deal to Boost Train-7 Expansion and Energy Security

Nigeria LNG Signs 20-Year Gas Supply Deal to Boost Train-7 Expansion and Energy Security

In a bold step toward strengthening Nigeria’s energy security and industrial future, the Nigeria LNG Limited (NLNG) has signed long-term gas supply agreements with the Nigerian National Petroleum Company Limited (NNPC Ltd.), alongside major industry players including Shell Nigeria Gas, Oando Group, Aradel Holdings, and First Exploration & Petroleum (First E&P).

The deal, which spans 20 years, secures the delivery of up to 1.29 billion standard cubic feet per day (scf/d) of natural gas to feed NLNG’s operations, including its ambitious Train-7 expansion project located at Bonny Island, Rivers State.

A Milestone for Train-7

The $10 billion Train-7 project, which is currently 80% complete, is one of Nigeria’s most significant gas infrastructure projects. Once commissioned, Train-7 is expected to boost NLNG’s capacity by 35%, increasing output from 22 million tonnes per annum (MTPA) to approximately 30 MTPA.

Industry analysts say the project is central to positioning Nigeria as a global hub for liquefied natural gas (LNG) exports, diversifying foreign exchange earnings, and meeting growing global demand for cleaner energy.

Addressing Supply Challenges

Nigeria’s LNG plants have in recent years faced operational hiccups due to chronic gas supply shortages, pipeline vandalism, and disruptions in feedgas flow. The newly signed contracts aim to resolve these challenges by diversifying supply sources and ensuring a more reliable and sustainable flow of natural gas to the Bonny Island facility.

An NLNG spokesperson noted:

“This agreement represents a landmark in securing Nigeria’s energy future. It gives assurance not just for Train-7, but for the long-term sustainability of our LNG operations.”

Strategic Partnerships for Growth

By involving multiple upstream gas suppliers—including Shell, Oando, Aradel, and First E&P—the deal ensures redundancy in supply. This multi-sourcing strategy significantly reduces risks associated with pipeline sabotage and regional disruptions.

The NNPC, as majority shareholder in NLNG, described the agreement as a demonstration of its commitment to leveraging Nigeria’s vast gas reserves for industrial growth, job creation, and foreign investment attraction.

Boost for Nigeria’s Energy Transition

The deal also plays directly into Nigeria’s energy transition plan, which prioritizes natural gas as a bridge fuel. By expanding LNG production, Nigeria hopes to reduce its dependence on crude oil while also lowering domestic carbon emissions through cleaner energy adoption.

Energy policy experts argue that the project strengthens Nigeria’s role in the global LNG market, where demand is surging amid Europe’s energy diversification drive and Asia’s growing appetite for LNG imports.

Economic Implications

Foreign Exchange Earnings: Increased LNG exports are projected to add billions of dollars annually to Nigeria’s foreign reserves.

Job Creation: Train-7 construction has already created over 12,000 jobs, with more opportunities expected post-commissioning.

Domestic Impact: The project will enhance gas availability for local industries, including power generation and manufacturing.

What’s Next

With construction on Train-7 nearing completion, the gas supply deal is seen as the final major hurdle toward operational readiness. Once online, Train-7 will reinforce Nigeria’s standing as Africa’s top LNG exporter and among the world’s leading players.

As the government doubles down on its “Decade of Gas” initiative, this agreement reflects both industry confidence and national resolve to turn Nigeria’s vast natural gas reserves—estimated at over 200 trillion cubic feet—into sustainable economic growth.