NEWS
Nigeria fire will lead to LNG shortages in US
Houston, Aug 31 (LNG journal)
- The fire in a pipeline to Nigeria LNG's Bonny Island terminal has shut down Trains 2 and 3 and limited output from Train 1 and the impact will soon be felt by US LNG buyers, said consulting firm Commercial Services Co.
“Nigerian LNG has likely declared force majeure on one spot cargo which was to have loaded on August 26 for Excelerate Energy, the first cargo that will directly impact US imports,” said Steve Johnson, principal of Houston, Texas-based CSC.
See Nigeria LNG cuts output after pipeline fire
“The overall impact on the US could be significant with Lake Charles imports expected to take the full brunt of the impending European shortages,” Johnson added. “The first cargoes expected to be pulled out of US import schedules - with the exception of a few cargoes already in-route - are going to be Egyptian cargoes, then Algerian if need be.”
Johnson also said that with current record high natural gas prices in the US , a European price threshold will be put to the test.
“There are three vessels recently underway and en-route to Lake Charles from Egypt and Algeria , which would indicate that buyers in Europe are reluctant to push the ‘panic button' and are still assessing the supply situation before paying record high spot prices,” he added.
“European inventory levels will ultimately determine the degree of spot purchases by Spain and France , and there is a steady flow of LNG passing through the Mediterranean to choose from when the time comes - although prices are not likely to come down over the next few weeks,” he said.
Nigeria currently exports roughly 800,000 metric tonnes of LNG a month to Spain , France , Portugal and Turkey , totaling about 27 percent of all European LNG supply. Early estimates are that 10 to 12 cargoes of LNG will be lost and production is not expected to resume at full capacity for at least four to five weeks, according to CSC.
