Nigeria LNG (NLNG) has signed 20-year supply contracts with state-run Nigeria National Petroleum Company (NNPC), Shell, Oando Group, First E&P, and Aradel Holdings, Reuters reported on August 23.

The agreements will help NLNG address feedgas issues that have plagued its Bonny Island LNG facility. In total, the deals are expected to see NLNG supplied with around 1.29bn cubic feet (37mn cubic metres) per day to supply its liquefaction facilities and expansion plans.

NLNG’s flagship Bonny Island LNG plant currently consists of six liquefaction trains with a production capacity of 22mn tonnes per year (tpy). That figure represents about 5% of the global LNG supply.

A seventh liquefaction train, built at a cost of $10bn is now 80% complete. The addition of another liquefaction unit will push the facility’s production capacity to 30mn tpy.

Securing additional long-term feedgas contracts for NLNG helps alleviate concerns over upstream gas shortfalls, which have plagued Nigeria’s growth plans and hampered progress on its energy transition.

Nigeria’s energy sector has long been plagued by pipeline disruptions due to vandalism and sabotage.

Earlier this year, Nigeria saw gas supplies plummet by as much as 80% and LNG exports nosedive by 40% amid persistent attacks by militants on the pipeline infrastructure of the West African country.

The new contracts signed by NLNG over further security for gas supplies through diversifying the feedgas sources for the Bonny Island LNG plant.

Global LNG demand continues to grow and the world’s largest LNG trader, Shell, predicts that demand for the super-chilled fuel will soar by 50% by 2040, as demand in Asia, especially China, drives growth.

NLNG is jointly owned by NNPC, which holds a 49% stake, Shell Gas possesses a 26% interest, TotalEnergies owns a 15% stake, and Eni holds the remaining 10% stake.