Nigeria LNG (NLNG) is set to receive a 12% increase in its gas supply thanks to a new agreement with Seplat Energy, a move aimed at alleviating the operational challenges caused by rampant fuel theft and pipeline vandalism.

Effiong Okon, a top executive at Seplat, revealed that the deal will see the company supply over 150,000 tons of gas per month to the NLNG plant on Bonny Island, Rivers State.

This represents a significant increase over NLNG’s average gas intake in the previous year.The agreement marks a pivotal moment for NLNG, a joint venture with the Nigerian government, Shell, TotalEnergies, and Eni, as it is only the second time the company will source gas from a third-party supplier.

“The deal is crucial for NLNG’s stability, especially considering the ongoing challenges with fuel theft,” Okon said. “We’re working to finalize the technical and commercial aspects of the agreement, with gas flow expected to begin in Q3 of this year.”

Seplat’s gas production has surged by 50% following its acquisition of assets from ExxonMobil Nigeria, and the deal with NLNG is also expected to inject vital revenue into Seplat’s ANOH gas plant, which has been idle due to delays in completing the necessary pipeline infrastructure.

Katlong Alex, an analyst at the African Energy Council, called the deal a “strategic convergence of need and opportunity,” adding that it allows both parties to overcome critical challenges while benefiting from a more reliable gas supply.

While the agreement is viewed as a “short-term” solution pending the completion of the delayed east-west pipeline, it provides immediate relief for NLNG, which has been facing an 80% drop in gas supply due to leaky pipelines.

The collaboration underscores the growing capacity of indigenous companies like Seplat Energy to address challenges within Nigeria’s oil and gas sector, positioning them as key players in the country’s energy landscape.