Portugal to Boost LNG Imports from Nigeria, Reducing Dependence on Russian Supplies

Nigeria was responsible for 51% of these imports, while the United States provided 40%. This shift is part of a broader European effort to eliminate reliance on Russian energy sources, which was especially critical following geopolitical tensions triggered by Russia’s invasion of Ukraine.

Portugal’s energy independence is vital, and the country is well-positioned to achieve this goal by diversifying its LNG supply. By enhancing imports from Nigeria and the United States, Portugal aims to further sever ties with Russian energy. Environment Minister Maria da Graca Carvalho has emphasized the importance of this strategy, underscoring the role of increased European cooperation in ensuring energy security across the continent, particularly as the Iberian Peninsula remains relatively isolated due to limited interconnections with France.

Diversification of LNG Sources: A Key National Goal

The Portuguese government’s energy strategy includes a clear focus on diversifying its natural gas imports. With LNG representing 96% of its total gas imports, the country has significantly reduced its reliance on Russian gas, from 15% in 2021 to a mere 4.4% in 2024. This shift is indicative of Portugal’s commitment to securing energy supplies from more stable and diverse sources, particularly Nigeria and the United States, both of which have emerged as key players in the global LNG market.

Minister Carvalho’s remarks have highlighted the country’s near independence from Russian gas, with further plans to reduce imports. The government’s efforts align with the European Union’s broader energy goals, which include ensuring energy security and reducing reliance on Russia. In this context, the Iberian Peninsula’s energy strategy has become crucial, and Portugal’s infrastructure, including the Sines LNG terminal, plays an essential role in processing and distributing imported LNG.

Challenges to Securing Stable LNG Supplies

While Portugal has made impressive progress in securing LNG from diverse sources, the country faces several challenges that could disrupt its energy strategy. One significant issue is the stability of LNG deliveries from Nigeria. In recent years, Nigeria has faced challenges such as gas theft, vandalism, and supply disruptions. These issues have raised concerns about the consistency of Nigerian LNG exports, which could impact Portugal’s energy supply.

For instance, in 2022, there were fears of potential LNG shortages in Portugal due to disruptions in Nigerian gas deliveries. These challenges are compounded by broader geopolitical risks and market fluctuations that affect LNG prices and availability. Despite these uncertainties, Portugal has been proactive in securing alternative sources of LNG, including expanding its relationships with the United States, to mitigate these risks and strengthen its energy security.

Nigeria’s Economic Reforms: Attracting Global Investment

Nigeria’s recent economic reforms, under the leadership of President Bola Tinubu, have positioned the country as a burgeoning hub for international investment. These reforms have been instrumental in attracting significant foreign partnerships, further boosting Nigeria’s economic standing in global markets. Notable investments include Coca-Cola’s announcement of a $1 billion investment in Nigeria over the next five years, demonstrating confidence in the country’s business environment despite the challenges.

Additionally, Nigeria has engaged in high-profile agreements with several countries to revamp key infrastructure and industries. One such collaboration is with the Chinese state-owned company CNCEC, which has entered a $1.2 billion deal to improve a critical gas processing facility. This agreement not only enhances Nigeria’s energy infrastructure but also strengthens its position as a key player in the global aluminum market.

International Partnerships Fuel Nigeria’s Economic Growth

Nigeria’s renewed commitment to economic reforms is attracting partnerships from a wide array of international stakeholders. In Europe, the United Kingdom and Germany have expressed strong interest in deepening their economic and defense ties with Nigeria. President Tinubu has called for more investments from the UK, emphasizing the importance of expanding Nigeria’s trade relationships and fostering long-term collaborations.

Beyond Europe, Nigeria’s economic ties with India are particularly significant. India remains Nigeria’s largest trading partner in Africa, with a trade volume of approximately $16.35 billion in 2019-2020. Indian companies have invested over $15 billion in Nigeria, focusing on diverse sectors such as pharmaceuticals, telecommunications, and engineering goods. Furthermore, the World Bank’s approval of a $2.25 billion loan to Nigeria will help support ongoing economic reforms, bolster revenue generation, and assist the country in managing its development challenges, especially in poverty reduction and oil revenue reforms.