Posted - August 29, 2013 - BY Editor - Business Day
Higher output of liquefied natural gas (LNG) from Nigeria, Algeria
and Angola marks a turnaround from a period of volatile output in recent
months, easing global LNG supplies.
LNG spot prices fell to $15.30 per million British thermal units
(mmBtu) last week as African suppliers pumped out more cargoes in a
spree of tenders aimed at Asian and Latin American buyers, reported
Reuters.
A three-week naval blockade of Nigeria’s Bonny Island production
facility crippled exports last month, but output has rebounded since and
its first free-on-board tender has been successfully concluded.
Malaysia’s Petronas and BG Group have each won a cargo from the
facility loading in early September, according to trading sources.
Angola’s new LNG plant also appears to have surmounted recent
setbacks after exporting a third cargo, amid talk that a fourth cargo
may be imminent before the facility shuts down for diagnostic tests.
Angola’s first cargo sailed to Brazil. The second was sold in a
tender process to Chevron, the plant’s operator, which then re-sold it
to China National Offshore Oil Corp. for around $16.20/mmBtu. Chevron is
said to have paid $16/mmBtu for the cargo.
Angola’s third cargo was said to be heading to Japan.
But it is Algeria that has dealt traders the biggest surprise with a
spree of tenders for spot and medium-term LNG supplies in recent weeks.
Algeria’s state-run energy firm Sonatrach has launched several LNG sales
tenders including for single cargoes, a six-cargo strip from October
and a 12-month supply commitment, trade sources said.
Three tenders offered to global buyers is unusual for Algeria where
falling gas production and a lack of upstream investment has reduced LNG
output in recent years. But the country’s LNG output may rise after
officials agreed to scale back piped gas deliveries to Italy, signalling
a shift in export strategy for Africa’s biggest gas producer.
Japan has relied heavily on LNG to make up for the nuclear power
capacity it lost after the 2011 tsunami, but utilities have recently
been ramping up coal use to cut costs.
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