Abstract
Consideration for the environment is one of the major reasons for the ongoing global shift to gas as an energy source. Natural gas is a clean-burning fuel and poses less problems for the environment, when compared with current commercial sources of energy. This shift is gradually evolving a growing world demand for natural gas to be supplied either as pipeline gas or liquefied natural gas (LNG). Nigeria, with its relatively huge gas resources, is poised to supply a substantial part of this growing world demand with its LNG, which is expected to come on-stream by the final quarter of 1999. This paper examines the economics of Nigeria's LNG project. Nigeria is currently concentrating on the United States of America (USA) and Western European markets, because its LNG can be sold at competitive prices there. The study covers the demand and supply scenario in the world LNG trade. The activities of buyers and sellers in the world LNG trade are examined, with a view to identifying new markets for Nigeria's LNG. A payout time for the project is estimated and strategies for breaking into new markets are suggested. Finally, useful recommendations are made to ensure the sustainability of the LNG project.
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