Following collapsed demand for Nigeria’s oil in the international market, and while buyers obliged to take cargoes under long-term contracts are postponing deliveries they don’t need, Nigeria is reportedly running out of places to park its liquefied natural gas.
Ship trackers said ships laden with Nigeria cargo are floating and idling away in Canary Islands and Arabian Sea, unable to offload.
Some of the vessels from Nigeria had been on the seas since March 2020.
BNN Bloomberg reported yesterday that Nigeria continued to send out tankers of liquefied natural gas (LNG) even as demand slumped in line with the virus-stricken global economy. “Almost half of the world’s LNG vessels currently deemed floating storage are laden with Nigerian gas,” the agency quoted Kpler, a commodity tracking firm.
The report noted that Nigeria, which is one of the oldest and biggest suppliers of LNG to Europe, highlights the challenges all producers are facing in the Corona Virus pandemic.
Record-low prices for the fuel also mean traders prefer to keep LNG in terminal tanks. That has created highest inventories at European import facilities for the time of the year since at least 2013.
BNN Bloomberg said Nigeria sent so many cargoes in April that some ships are now taking three times longer to reach its key export market of Europe as deliveries are deferred. “Some delays are occurring for arrivals into Spain, which has more import terminals than any other European nation,” the agency said.
The managing director for energy at Accenture Plc, Manas Satapathy, was quoted in the report saying, the longer LNG stays on the water, the more desperate cargo owners feel the need to offload. That is because prices will probably only fall in coming weeks, and it costs money to keep LNG in tankers. “The worst is yet to come, we will likely see super low prices in late June, July, August,” said Satapathy. “We are still in the declining mode, we haven’t reached the bottom yet, the bottom will be in late summer.”
One vessel, the LNG River Niger, departed from Nigeria in the second half of March and still hasn’t unloaded, according to Kpler. The ship is in the Arabian Sea, according to ship-tracking data compiled by Bloomberg.
Other examples of what appear to be deferred tankers are the LNG Abalamabie and LNG Borno. Both loaded in the middle of April but won’t arrive at France’s Dunkirk and Montoir, respectively, until May 27. The journey usually takes less than two weeks.
Both ships are idling off the Canary Islands along with the LNG Bayelsa and LNG Cross River, which plan to unload at Spain’s Huelva facility later this month. Spanish terminals are expected to be even fuller in June, reaching max capacity at times, as 25 ships are expected next month versus 23 in May, data from operator Enagas SA show.
The report said that Spanish regulation allows shippers to move a small percentage of scheduled ships from one month to another. That remains a commercial decision of shippers, who can also decide whether to keep gas in tanks or put it into the grid.
Chibisi Ohakah
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