On a tropical island just off the coast of Nigeria, hundreds of engineers work around the clock to produce liquefied natural gas at a plant the size of Lower Manhattan.
Operator Nigeria LNG Ltd says it will decide later this year whether to invest more than $10 billion to boost capacity by 40 percent. That would allow the Bonny Island terminal — an hour’s ferry ride from the oil hub of Port Harcourt — to export as much as 66 million cubic meters (30 million tons) a year to markets in Europe and Asia.
NLNG’s shareholders — Royal Dutch Shell Plc, Total SA, Eni SpA and state-controlled Nigerian National Petroleum Corp. — must weigh the benefits of expanding their profitable venture against the threat of higher taxes, pipeline vandalism in the Niger River delta and volatile gas prices. Those concerns have already delayed the project first mooted in 2012.
Any further interruptions will increase the risk that Africa’s biggest oil producer misses the global transition to cleaner fuels and a chance to reduce its stuttering economy’s reliance on crude.
“Nigeria needs to take the opportunity,” said Maggie Kuang, an analyst with Bloomberg New Energy Finance in Singapore. “The next few years are critical for investment decisions. If Nigeria does not take any action, it will fall behind.”
Last year, the West African nation shipped 46 million cubic meters of LNG — almost all from Bonny Island — making it the world’s fourth-biggest exporter behind Australia and Malaysia, according to data compiled by Bloomberg.