EU makes offers to Nigeria to drive LNG supply to replace Russian gas

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An official of the European Union in an exclusive interview with PREMIUM TIMES said the EU is willing to help Nigeria increase the competitiveness of its liquified natural gas (LNG).

Matthew Baldwin, EU deputy director on energy, told PREMIUM TIMES that the EU is willing to partner with Nigeria to make its gas cleaner thereby improving its competitiveness in years to come.

Mr Baldwin who visited Nigeria on a fact finding mission said the EU is seeking to move away from Russian gas following the aggression on Ukraine (by Russia) and gas cuts. Russia’s state-owned gas company Gazprom on 25 July said it would cut flows through the Nord Stream 1 pipeline to Germany in half, to just 20 per cent of its capacity.

“We can no longer count on gas coming from the Russian Federation and we want to build a new partnership with countries like Nigeria with whom we have an already well established partnership to obtain more gas and LNG from you on good commercial terms,” Mr Baldwin told PREMIUM TIMES.

Excerpts:

PT: Europe for a while now has talked about energy transition; phasing out unclean energy, moving away from gas and fossil fuel but you are here to see how to get more gas into Europe from Nigeria. Is that not contradictory for the mission?

Mr Baldwin: Not at all but I quite understand your question. I think it is very much the right question to ask because, we are very supportive of what Nigeria is doing with regards to its energy transition plan, the major commitment that you have taken to deliver and be climate neutral by 2060. We are looking to be the first climate neutral continent by 2050 and then you are not far behind.

We are committed to supporting you in those efforts. I think for both of us, gas is going to be an important transition fuel, which is one of your major exports and commodities and we want to be major customers of Nigerian gas.

EU delegation with PREMIUM TIMES

And here is the explanation to the dichotomy: we need more gas from Nigeria as a result of the terrible war of aggression Russia has mounted on Ukraine. We can no longer count on gas coming from the Russian Federation and we want to build a new partnership with countries like Nigeria with whom we have an already well established partnership to obtain more gas and LNG from you on good commercial terms. So that is the reason, there is no dichotomy and we are determined to support your efforts to move into renewables, to use energy more efficiently, to reduce your use of energy, we are doing that ourselves, we have a major gas reduction plan but again, we will need more gas coming from Nigeria to replace the gas (Russian gas) we are taking out of the system.

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PT: Is Nigeria the only partner or option you are looking to get gas from in Africa? Africa appears to be the beautiful bride everyone wants to court, so what other parts of Africa are looking towards?

Mr Baldwin: This is my first visit in my new function as running the energy platform taskforce and I am very proud that Nigeria is the first country I have visited but obviously we have a signed memorandum of understanding with Egypt and Israel and president of the European Commission was in Azerbaijan on Monday (July 18) with my commissioner to sign an MoU with Azerbaijan and other partners and of course she mentioned Africa.

There are some very interesting potential sources for us to look at but I think Nigeria should enter these discussions with a spirit of confidence, we are already getting 14 per cent of our LNG from Nigeria and we would like to increase that amount and that is why the security of the gas supply in Nigeria is so important … why the commitments we have had this week from the NNPC, from the minister, from the military is so important in terms of safeguarding the asset that you have.

PT: So do you have a target that you are looking to move up to?

Mr Baldwin: I do not want to put a number on that and partly because I am not the negotiator for the gas contracts that is for the companies to look at …but companies are interested in bringing more LNG from Nigeria and if you look at the total potential LNG reserves in Nigeria, it could go all the way from 14 per cent to something in the 30s. So this is a huge potential that we see here in Nigeria as a partner.

PT: Nigeria already has an energy transition plan but if we must make a good transition, we will need technologies to do this. Is this part of the conversation?

Mr Baldwin: This is the point we have heard very eloquently expressed by the Minister of State for Petroleum. He said he wants to look at technologies; I think there are a lot of things we can talk about, such as carbon capture, utilisation and storage. How do we capture the global methane partnership which Nigeria signed up to at the last COP meeting in Glasgow. Let us look at the different technologies we need to green the gas supply even further to make gas even cleaner fuel and thereby improving your competitiveness in selling your LNG in years to come.

PT: There is a feel of hypocrisy and opportunism from the Global North; people say that you would not have come to Africa if Russia did not attack Ukraine. Is this a fair assessment of the issues from an EU perspective?

Mr Baldwin: I would politely reject the accusation of hypocrisy or opportunism on our part. I think we are ready to acknowledge that in the past, we have allowed ourselves to be too dependent on gas from one supplier and we have been trying to adjust that dependency over the last few years since the incidents in 2006, 2009 and as I said we have been steadily increasing our purchase of LNG from Nigeria over the last few years to get 14 per cent.

I think the war changes everything, makes it clear that we cannot count on Russian gas and the president of the EU Commission has made it very clear that we want to get out of Russian gas completely and I am coming here in an open, free, frank and friendly way to discuss with our friends here in Nigeria whether we can do something of mutual benefit and again, it is not just about coming here to grab LNG and run.We want to develop a long lasting energy partnership, I think we have established that in terms of helping you with the energy transition plan and may be I am too optimistic but I think what we have is a good working platform to take things forward together.

PT: For clarity, what are the supports the EU is offering to Nigeria per its energy transition plan?

Mr Baldwin: You have rightly asked for support, I think you set a target of $10 billion a year in terms of support. When I look at the numbers that have already been pledged or that are in programmes, it is up to $6 billion if you take into account the support of big donor partners such as the World Bank and from outside, we have already pledged in the future a total of $400 million and these are in exciting things like how we can improve the quality of your grid, helping where you need to go off-grid, in terms of decentralising your energy use. There are a lot of exciting things we can do together and that is why I get revved up about this new agenda and partnership we can deliver.

PT: We saw how the energy conversation shifted at the G7 summit; how do you think this will impact climate change commitments?

Mr Baldwin: I do not know. I was at the COP26 in Glasgow and it was a vibrant discussion in so many different areas including of course in climate financing, what Mccann talked about there with the climate fund, I think it is €3 trillion of potential funding out there. There is huge interest in the financial community in funding genuinely carbon neutral projects and I think Nigeria, if it positions itself well, is going to be in a good position to take that forward. I know that there are commitments you would like the G7 to take in supporting your energy transition, I cannot speak for the G7 but I think your message is being heard loud and clear about what your ambitions are and I think let us take the partnership on things like methane and things like technologies forward into the COP27 and take it on beyond that as well.

PT: The $100 billion climate finance commitment; where are we with it? Is the Global North reneging on its pledge?

Mr Baldwin: Not at all. I know that the global south would like to see quicker and frank commitments, I think we in the EU have delivered on all our commitments and we are keen to push forward on that and to be leaders on that. We are proud of our engagement with the global south.

Matthew Baldwin with PREMIUM TIMES’ foreign correspondent, Chiamaka Okafor
Matthew Baldwin with PREMIUM TIMES’ foreign correspondent, Chiamaka Okafor

It is not an area of direct responsibility for me so I do not know the precise figures but I think I can say, we very much understand the wishes of the global south to take this forward and we are very keen to be your partners in helping access these big flows much coming from the private sector I think in the future to transform your position, to take forward your energy transition plans and develop a real partnership for us in the future.

PT: Apparently, the war in Ukraine is draining all the resources that would otherwise go to climate change financing in other parts of the world. From an EU perspective, is this a fair assessment of the issues?

Mr Baldwin: You are right to say that Ukraine is a European country and we need to be really conscious of this disaster that has befallen a neighbouring country in our backyard, an unjustified war of aggression and we make no apologies for that.

Yes, it has been a clear focus of our attention and it will be until that war of aggression ends and we can set things straight but I think we are wrong to underestimate the impact of this war on Africa and the rest of the developing world. The blockage in the ports of Ukrainian grain, Europe will be hungry, Africa risks starving if we do not get that grain out and I heard overnight of a deal which will enable that grain to come out and that is not a moment too soon.

But more generally, I think we are capable in the EU with other international partners … once we know we have got this for long term battle in terms of climate change and we know that is only going to happen if we have a partnership with the global south, countries like Nigeria which has been bold enough and brave enough to step up to the plate and say it is ready to take on the commitments, we welcome that.

You are the most populous country in Africa, you are at the same time the richest and poorest country in Africa in terms of your population and so that makes you the perfect partner to take forward some of these issues and make sure that we address climate change in a fair way.

PT: You keep saying Nigeria needs to take leadership, what for you will make for exemplary leadership in the climate change conversation?

Mr Baldwin: I would not tell Nigeria what it should be doing. Nigeria is a mature and impressive partner and leader. So when you put your finger on it, this thing is already affecting Nigeria and Africa, it risks starvation and lack of access to water as well as terrible extremes of climate in the future and we want you to continue to do what you are doing, to work with us as partners. One of the ministers said, we are brothers in this because we are one world and that is so right, let us take that seriously, let us take that forward together and be a good example for the rest of Africa.

Chiamaka Okafor is a reporter at Premium Times in partnership with Report for the World, which matches local newsrooms with talented emerging journalists to report on under-covered issues around the globe.


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