Nigerian oil major Nigeria LNG confirmed Thursday that there is a “significant disruption” in natural gas deliveries due to flooding that hampered its operations and export capacity, including supply to Portugal’s Galp.
“There is a significant interruption in the supply of gas,” the company said in statements to the AP news agency, in which it confirmed that it declared “force majeure” on Monday due to the impact of the floods on its gas extraction and export operation. natural gas. .smoothie.
The Portuguese energy company GALP was among the first to warn that gas exports from Nigeria to Portugal were being affected, in an amount that could reach 3.8% of the supply made by the largest gas producer in sub-Saharan Africa, according to the Rystad Consulting. Energy.
Nigeria LNG is majority owned by the Nigerian Government, and also includes the energy giants Shell and Eni, with the capacity to produce more than 20 million tons of liquefied natural gas per year, although production does not exceed 70% due to vandalism and the robberies that affect the gas pipelines of the most populous African country.
Flooding in Nigeria has killed more than 600 people and forced 1.3 million people from their homes, “aggravating an already bad situation” for the national gas company, Nigerian energy consultant Toyin Akinosho told the AP.
The NLNG supply cut is bad news for Europe, as Nigeria accounts for 14% of natural gas imports on the continent, but also for other customers in North America, the Middle East and Asia.
“The ‘force majeure’ invoked by the company makes liquefied natural gas markets even tighter” ahead of winter, when demand is highest, Nigerian analyst Olufola Wusu said.
“Most likely, if we can’t meet local demand, we will hardly have enough gas to export, which means some of our customers will be forced to buy natural gas from other suppliers,” he added.
In the last 12 months, NLNG has been exporting around 20 cargoes a month, half of which are going to Europe, according to the financial information agency Bloomberg, which notes that the impact on the market has been limited so far.
Europe is facing a time of relaxation of the energy crisis, with strong natural gas flows, full inventories and weather forecasts pointing to moderate temperatures: “With current inventory levels, this could have a less severe impact than initially anticipated as recovery from other suppliers could offset lower production from Nigeria,” said Michael Yip, an analyst at BloombergNEF.
Nigeria LNG warned Galp of “a substantial reduction in the production and supply of liquefied natural gas” due to the rains and floods in West and Central Africa, which could endanger the supply in Portugal, according to a note sent by the Portuguese company to the Securities Market Commission on Monday night.
In that note, Galp said that “information has not yet been made available to support the assessment of the possible impacts of the event, which, however, may result in additional supply interruptions” to the Portuguese oil company.
Following this information to the market, the Ministry of Environment and Climate Action said that “there is currently no confirmation of a reduction in gas deliveries from Nigeria”, stating that there is still “no shortage in the market”.
The guardianship stressed that “any alarmist information is inappropriate, even more so in times of global uncertainty.”
Source: TSF
