Olufemi Adeyemi
Nigeria will supply gas to the European Union (EU) as the Russia-Ukraine war which started in late February lingers.
The EU Delegation to Nigeria and Economic Community of West
African States (ECOWAS) made the disclosure at the weekend.
The Russia-Ukraine war has forced the US and its allies to
seek alternatives to their energy supply. The war which started in February,
created a global energy crisis that shot gas and other commodities’ prices up,
stoking inflation across countries.
The global economic crisis was triggered by a series of
US-led sanctions leveled against Russia in the wake of its invasion of Ukraine.
The Kremlin’s attempt at retaliation, which has been largely tied to cutting
off oil supply to many countries, has triggered a massive push for
alternatives, particularly in Europe.
Thus, the European Union (EU) delegation to Nigeria and
ECOWAS said on Friday that it would replace the gas from Russia with Nigeria
gas.
The EU’s decision to seek out Nigeria as an alternative
supplier of gas was disclosed by the Deputy Director-General Department for
(Energy), European Commission in Brussels, Matthew Baldwin, at a news
conference on Friday in Abuja.
Baldwin will be meeting with top government officials in
Nigeria and private sector players, including key stakeholders in the country’s
energy sector.
The European Union has stood by the United States against
Russia as it pounds Ukraine. Being their sole supplier of energy, the Kremlin
has threatened to sever its energy supply – and the threat is becoming very
imminent.
The EU’s executive body had urged member states to slash
their gas consumption by 15% to avoid an energy crisis in case Russia cuts off
supply this winter. But its primary goal is to see that the bloc is weaned off
its dependence on Russia energy.
“In summary, I am on a mission from Europe to try to deliver
Liquefied Natural Gas (LNG) today in the context of NLG partnership tomorrow
with Nigeria.
“Europe is in a tight spot in relations to gas, following
the Russian invasion of Ukraine and the instability in our gas market and the
threat of cutting off supply altogether.
“So, we have launched the energy platform task force and the
primary goal is to reach out to our reliable partners such as Nigeria to
replace the gas from Russia with gas from reliable partners,” Baldwin said.
He had earlier this week disclosed that the EU has launched
a gas demand reduction plan and is looking to reduce demand of gas by 15% to
manage the demand aspect of the equation.
“To be clear, we need to manage the supply side and that’s
why we want to expand what is currently at 14% shares of our total LNG import
from Nigeria and we want it to go up.
“Our gas percentage was 60 per cent but now we want to go,”
he said.
He added that Nigerian products had extraordinary potentials
and that was why the EU wanted to expand the short term delivery.
The Deputy Director-General said that the EU hopes to
kickstart the partnership by the end of August this year, which would create a
long term partnership with Nigeria.
The report quoted Samuela Isopi, the EU delegation to
Nigeria and ECOWAS, as saying that the bloc was doing its part in contributing
to the energy sector by collaborating with Nigeria.
She said the EU’s current contribution stands at 400 million
euros, and remains Nigeria’s biggest trading partner accounting for over 20% of
Nigerian trade with the world.
The energy partnership is expected to increase EU-Nigeria
trade volume which stood at 28.7 billion euros in 2021, with a trade balance of
6.4 billion euros in favor of Nigeria.
However, while the partnership bears a huge economic
potential, Nigeria’s ability to live up to EU’s potential energy demand is
under serious question.
Nigeria’s oil output has been spiraling downwards even in
the wake of the oil windfall orchestrated by the Ukraine crisis.
Nigeria’s oil production has been losing its place in the
Organization of Petroleum Exporting Countries (OPEC)’s ranking. It dropped
Year-on-Year, YoY, by 14.3% to 1.4 million barrels per day, mbpd in the first
half (January – June) 2022, from 1.6 mbpd in the corresponding period of 2021,
according to the Oil Production Status Report of the Nigerian Upstream
Petroleum Regulatory Commission, NUPRC.
The oil output also dropped Month-on-Month, MoM, by 23% to
1.3 mbpd in June 2022, from 1.7 mbpd, recorded in the preceding month, May
2022.
Against this backdrop, Nigeria has been failing to meet its
OPEC’s quota of 1.826 mbpd.
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