Liquefied Natural Gas producers have been encouraged to shut in some supply amid the global glut that is helping drive down price in Asia making a case for policy and investment decisions that will encourage use in Nigeria.
At the 19th annual S&P Global Platts LNG Conference in Houston, analysts said that the expansion and additional units coming online in the US built by Qatar and supplies coming from Australia and other exporting countries are pumping more LNG into the traditional end-use market than they can handle.
New additions are coming including from Nigeria who only a few months ago, reached final investment decision on Train 7 of the Nigerian LNG project. This is expected to add….
While there are mini LNG projects in Nigeria largely built by Greenville Energy, the focus of Nigeria’s LNG is export-based. NLNG signs long-term supply contracts to countries in Asia and Europe which insulates it from the uncertainties of spot trading. But its difficulty remarketing new volumes to buyers are getting more volumes from the spot market speak to the need to evaluate its strategy.
Some analysts have continued to champion greater use of LNG in Nigeria. OlufolaWusu, an energy lawyer and founder of Megathos Law Practice says LNG finds uses in different segments of the economy including shipping, agriculture and other sectors.
The effect of oversupply in the global LNG market is the forces price south. Weaker-than-expected demand, relatively mild winter weather, the coronavirus outbreak and Chinese tariffs have made the situation worse.
“The global market needs to balance things by turning off the supply. Its got to get somebody to that. It has not done that in significant size,” said Andrew Helm, a senior LNG trader at British utility Centrica at the conference.
According to SP Platts, in the US, currently, the world’s biggest growth market for liquefaction capacity, utilization at the six major export terminals has remained robust despite challenging market environment, although feed gas deliveries have dropped in more than 1.5 bcf/d from the recent record levels, driven in parts by maintenance that Cheniere Energy and Sempra Energy were conducting at their Louisiana facilities.
