Nigerian firm plans first-ever gas supply deal to South Africa

AFRICAN BUSINESS AND ECONOMYDecember 28, 2023 at 4:29 PM UTC

Nigeria is poised to initiate the delivery of gas to South Africa, marking a historic milestone in the trade relations between the two nations. Talks between Riverside LNG, a Lagos-based energy firm, and counterparts in South Africa are underway, and if successful, this venture will mark the first time such a trade has occurred between the two countries.

David Ige, the CEO of Riverside LNG, mentioned in an interview that they are likely to finalize another segment of the market, securing an off-take agreement for South Africa early in the year. He emphasized the significant growth in the gas market within a radius of about 3,000 nautical miles of Nigeria, encompassing southern Africa, western Africa, northwest Europe, the Caribbean, and South America.

This development comes after Riverside LNG, in November, entered into a pact with Johannes Scheutze Energy Import AG in Germany, focusing on renewable energy and a gas export deal valued at $500 million.

Key Takeaways

Nigeria is actively working to attract foreign interest in its oil and gas industry, which has faced challenges such as crude theft, pipeline vandalism, aging infrastructure, and structural bottlenecks. These issues have contributed to the departure of international oil companies from the Nigerian market. To address these concerns and enhance the appeal of the sector, the government has implemented new measures and incentives to attract investors and reduce barriers to entry, aiming to improve the overall cost of doing business. One significant initiative involves incorporating signature bonuses, the fees collected from new investors upon contract signing, into the lump sum paid by oil and gas companies during production. This adjustment is part of the government's efforts to drive production and increase revenue in the sector.

Riverside LNG

Nigeria

South Africa

Gas Supply

Energy Export