More Nigeria Liquefied Natural Gas [NLNG] gas cargoes planned for February 2023 may be canceled due to pipeline vandalism.
The NLNG, the company that exports natural gas from the country, commenced cancellation of flights last Friday due to the menace.
The vandalism on the gas pipelines reportedly disrupted operations, forcing the NLNG to drop pre scheduled shipments, sources familiar with the matter told Bloomberg last Friday.
The number of shipments cancelled could have been as many as 10 cargoes, one of sources said. The report said Nigeria LNG has also declared a force majeure on export cargoes and scrapped at least 2 loadings scheduled for January.
Also Read: Nigeria’s Oil Output Has Increased Significantly, Can Do 2.2mbpd In 2023 – NNPC Boasts
The disruption in Nigeria LNG’s exports comes as Europe continues to look for LNG shipments to replace the lost Russian pipeline supply and start replenishing in April gas storage sites for next winter once this winter is over.
Despite the recent plunge in the European benchmark gas prices to below the North Asian benchmark, Europe continues to attract most of the U.S. exports of LNG as demand in Asia is still weak.
It is on record that Nigeria has also supplied a lot of LNG to Europe in recent months. The country’s LNG accounted for 7% of the European supply of the super-chilled fuel in 2022, per data compiled by BloombergNEF.
The country’s LNG operations and oil supply generally have suffered in recent years from floods as well as pipeline vandalism, which has often forced operators to declare force majeure on crude oil exports.
The combination of pipeline vandalism and oil theft with a lack of investment in capacity has made Nigeria the biggest laggard in crude oil production in the OPEC+ alliance.
Also Read: Nigeria’s Production Has Increased With New Onslaught Against Oil Thieves – NLNG
Surveys and analyst estimates pointed to a rebound in Nigeria’s oil production in December 2022, but the African OPEC producer is still significantly trailing behind its OPEC+ quota.
A rebound in Nigerian production raised OPEC’s oil output in December by 120,000 barrels per day (bpd) compared to November, according to a monthly Reuters survey published last week.
The Bloomberg survey of OPEC production also showed a rise in output for December, by 150,000 bpd over November, thanks to the rebound in Nigerian oil production.
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