Big fish: Gazprom is setting its sights on Nigeria's vast gas reserves
Gazprom comes knocking in Nigeria
Russia's gas export monopoly Gazprom is in talks with Nigeria to spend up to $2.5 billion on developing the west African country’s vast natural gas reserves, a senior Nigerian gas official said today.
"Gazprom has come twice to visit the federal government. They want to invest in Nigeria in gas exploitation, gathering and processing," a senior Nigerian government official working on gas policy told Reuters.
Gazprom has offered to invest between $1 billion and $2.5 billion to begin with, he added. A Gazprom spokesman was not immediately available to comment.
Nigeria is the world's eighth-biggest exporter of crude but even though it has the seventh-largest proven gas reserves in the world it has not developed its gas industry to anywhere near full potential.
Investors say the lack of a stable fiscal framework and market pricing for gas means that most investment ideas in the sector are uneconomic.
UK-based companies BG Group and Centrica have also proposed multi-billion dollar investments in Nigerian gas, the official added, asking not to be named because he is not allowed to talk publicly on behalf of the government.
Nigeria exports about 18 million tonnes of liquefied natural gas every year through Nigeria LNG, jointly owned by the state energy company, Anglo-Dutch supermajor Shell, France’s Total and Italy’s Agip.
Two other huge LNG projects, OK LNG and Brass LNG, are also on the drawing board. They each will cost about $10 billion to build and involve a consortium of western multinationals, but they have been stalled while the government works to reform its energy sector.
Gazprom has faced growing questions about the sustainability of gas supply from central Asia and has begun to extend its search for new reserves outside the region.
In 2006, it acquired four offshore exploration licenses in Libya and last month it acquired another three.