LNG Showdown: Canada Challenges Nigeria in Asia

Canada’s rise as a significant exporter of liquefied natural gas (LNG) is set to challenge Nigeria’s dominance in the Asian market. The newly established LNG facility at Kitimat, located on Canada’s west coast, is ideally positioned to cater to the increasing demand in Asia, which may diminish Nigeria’s market share.

Nigeria’s LNG shipments to Asia could see a reduction as Canada’s competitive pricing and geographical benefits render it a more appealing choice for purchasers. In 2024, nearly half of Nigeria’s LNG exports were directed towards Asia, with an additional third sent to Europe, while the remainder was distributed to the Americas and the Middle East. Canada’s foray into the Asian market poses a significant threat to Nigeria’s aspirations for expanding its market share and could undermine its current presence

Shell’s Contribution to Canada’s LNG Exports

Shell Plc has commenced exports from Canada’s inaugural LNG project, aiding in the fulfillment of the rising demand in Asia and bolstering its position within the global LNG sector. Cederic Cremers, Shell’s president of integrated gas, noted that the Kitimat terminal serves as a strategic site on the Pacific coast, linking cost-effective upstream gas from British Columbia to the burgeoning demand in Asia. A second production unit is anticipated to commence operations later this year, with the 14 million-ton-per-year facility expected to achieve full capacity by 2026

The global demand for LNG is anticipated to increase by 60% by 2040, primarily driven by Asia. This surge is likely to prompt additional investments in LNG infrastructure, including possible expansions at the Kitimat terminal. Shell aims to play a pivotal role in addressing this escalating demand, emphasizing competitive pricing, strategic alliances, and long-term supply contracts

Nigeria’s Strategy in Response to the Challenge

Nigeria is confronted with pricing pressures and heightened competition due to Canada’s entry into the Asian market, which may complicate the acquisition of new long-term contracts. To maintain its competitiveness, Nigeria must enhance its infrastructure and attract further investments.

Nevertheless, Nigeria has the opportunity to utilize its extensive natural gas reserves to boost LNG exports to China and other Asian nations. By providing competitive pricing and adaptable payment options, Nigeria can enhance its presence in the Asian energy sector and potentially expand its market share. Attracting additional investments from Asian firms and establishing long-term contracts with refiners can further assist Nigeria in preserving its status in the global LNG market. Canada’s rise as a prominent LNG exporter presents a considerable challenge to Nigeria’s dominance in the Asian market. To stay competitive, Nigeria must adjust to the evolving global energy environment, upgrade its infrastructure, and seek out new market possibilities. By taking these steps, Nigeria can sustain its market share and continue to have a significant impact on the global LNG trade.