Nigeria Faces Mixed LNG Demand Outlook As NLNG Sustains Growth

Though the Nigeria LNG is undaunted in its capacity expansion plans, tilting towards bringing on stream its Train-7, mixed projections on the global demand side are raising serious business development concerns, not only in Nigeria but across nations with strong LNG infrastructure.

According to recent reports, the Nigeria LNG (NLNG) Train 7 project is a significant investment, with a total cost of $10 billion. Following Russia’s gas cuts, the European Union is looking to Nigeria as an alternative to augment its gas needs.

The Deputy Director-General of the European Commission’s Department of Energy, Matthew Baldwin, said Friday, “Europe is in a tight spot in relation to gas following the Russian invasion of Ukraine and instability in our gas market, the threat perhaps to cut off supply altogether.”

Mr Baldwin, who visited Abuja, said the EU is looking to increase Liquefied Natural Gas (LNG) imports from Nigeria above current levels.

Nigeria currently supplies 14 per cent of the EU’s gas imports, while 60 per cent of Nigeria’s LNG shipments go to Europe, he said. “We want to expand what is currently at 14 per cent share of total LNG imports from Nigeria. We want that to go up,” he said.

Mr Baldwin said that the gas relationship between Nigeria and the EU has extraordinary potential, with the latter determined to deliver on it.

The Nigeria LNG is also actively participating in the 2026 International LNG Conference in Qatar, where the company is expected to highlight its commitment plans and growth strategies.

While it has been projected that Nigeria’s revenue from the export of liquefied natural gas (LNG) will get a major boost in 2026 as global output is set to jump, another interesting conversation is puncturing this hope.

It was projected that a boost in global supply will ease constraints seen since the 2022 Ukraine war, which dampened prices, and could spur demand, including from top importers China and India, analysts say.

This year marks the start of a large wave of supply that analysts expect to last until 2029, depressing prices and potentially driving more demand from emerging economies.

“2026 is expected to be a transitional year for the LNG market,” said Kpler in a report quoted by Reuters. “The market is expected to move away from tightness toward ample availability, with sufficient supply even as winter demand and storage needs emerge, particularly in Europe.”

Nigeria’s LNG exports saw a significant rebound in late 2025, hitting a five-year high in December at 2.1 billion cubic meters, driven by improved gas supply and plant utilisation, according to statistics from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The development positions Nigeria for a major surge in gas exports as new facilities, such as Nigeria LNG Train 7, come online, boosting its role as a key African supplier despite earlier challenges with theft and infrastructure.

In a new development, there are fresh concerns that as several countries invest in expanding their LNG production and export capacity, and significant quantities of the gas are expected to come online in 2026 after a record 2025, supply could soon outpace demand.

This begs the question: just how much LNG is needed to “fill the gap” as the world develops its renewable energy capacity?

Last year was a record year for LNG trade, as exports exceeded the quantities predicted in several industry forecasts.

The expansion of the world’s LNG trade has been led by the United States, which exported over 100 million metric tonnes of LNG in 2025. This was driven by several new plants coming online across the country.

The U.S. exported an estimated 111 million metric tonnes (mmt) of LNG in 2025, 23 mmt more than the previous year and far higher than Qatar’s 20 mmt, the world’s second-largest exporter, according to the data analysis firm LSEG.

LNG shipments from the U.S. contributed roughly 25 per cent of global LNG exports in 2025. The new Plaquemines facility, operated by Venture Global, the country’s second-largest export facility, shipped a reported 16.4 mmt of LNG last year after commencing operations in December 2024. Several other U.S. facilities also increased their deliveries last year following several years of investment. In December, the U.S. set a record monthly LNG export figure of 11.5 mmt.

The head of business intelligence at shipping firm Poten and Partners, Jason Feer, stated, “It is remarkable that in nine years the U.S. has gone from zero LNG exports to over 100 mmt, and the success validates the U.S. approach of selling free on board and pulling gas off the grid and the reliability of U.S. supplies.”

As the U.S. ramped up its LNG production and export capacity, there were fears of a glut. However, as the U.S. and Europe introduced sanctions on Russia following Moscow’s invasion of Ukraine in 2022, several European countries were forced to search for alternative gas suppliers, a role that the United States was well-prepared to take on.

Europe purchased 9 mmt of LNG from the U.S. in December alone, further reducing its imports from Russia.

While Europe still requires LNG, there are fears of the region’s growing overdependence on the United States, which could provide up to 80 per cent of its LNG imports by 2030.

On the other hand, as Europe ramps up its renewable energy capacity, fears of an LNG glut in 2026 and beyond are resurfacing.

The U.S. Plaquemines facility is expected to reach its full production capacity this year. Meanwhile, Cheniere’s smaller modular plants will reach full capacity or may even be expanded. QatarEnergy and ExxonMobil’s Golden Pass LNG is also expected to start production this year.

Together, U.S. LNG projects could increase the country’s annual LNG production by another 20 mmt, according to estimates.