The European Union, EU, is in top discussion with Nigeria to sustain Liquefied Natural Gas, LNG, supply deal to Europe.
European gas prices remain at sustained highs and Nigeria’s LNG supplies to Europe stood at 23.3 billion cubic meters, Bcm in 2021
Nigeria and the EU are to look at “all options” for increasing the supply of Nigerian LNG to Europe, as Brussels continues its push to engage with its gas supply partners amid the standoff between Russia and the West over Ukraine.
Concern over Russian gas supply to Europe has seen the European Commission make significant diplomatic efforts in recent weeks to seek additional gas deliveries from alternative suppliers.
EC executive vice-president Margrethe Vestager on February 14 in Abuja had important discussions with vice president Yemi Osinbajo, with LNG supplies high on the agenda.
“The importance of the energy relationship between Nigeria and the EU featured, while consideration of all options for increased supply of LNG from Nigeria to the EU was agreed to, following a request from the EU,” Osinbajo said.
“A technical meeting on this will be convened shortly,” it said.
Osinbajo was also quoted as saying that Nigeria was “relieved” to hear of the EU’s support on gas as a transition fuel.
Nigeria is a key LNG supplier to Europe and in 2021 exports amounted to 12.63 Bcm, according to data from S&P Global Platts Analytics.
The biggest buyers were Spain with 49 cargoes supplied or 4.3 Bcm of gas equivalent France (38 cargoes), Portugal (34 cargoes), and Turkey (15 cargoes), the data showed.
Several LNG cargoes were also delivered last year each to Croatia, Greece, Italy, the Netherlands, and the UK.
Nigeria’s six-train LNG export facility has a capacity of 22.5 million mt/year (31 Bcm/year), but it is being expanded to 30 million mt/year with the addition of a seventh train.
Total LNG exports from Nigeria in 2021 were 23.3 Bcm, according to Platts Analytics data, well below capacity and down from 28.7 Bcm exported in 2020.
Nigerian LNG exports were curtailed last year by technical issues that prevented the rapid return of certain reservoirs shut due to the country’s OPEC production restrictions.
Work to ramp up production at the shut fields had proven problematic, impacting gas supply to the LNG export plant.
The lower exports come as LNG prices remain at sustained highs.
Platts JKM, the benchmark price for spot LNG in Northeast Asia, reached a record high of $56.33/MMBtu last October, with prices remaining volatile through the winter. The JKM was assessed at $25.30/MMBtu on February 15.
European gas prices are also still at sustained highs on low storage levels and concerns over Russian supplies.
The TTF day-ahead price hit a record high of Eur182.78/MWh on December 21, an increase of 985 per cent year on year, according to Platts price assessments.
Prices have cooled since, though they remain high, with the TTF day-ahead contract assessed February 14 at Eur79.33/MWh, still a year-on-year increase of 350 per cent.
Concerns over Russia have pushed the EC to look to global LNG suppliers in a bid to reduce its dependence on Russian gas.
EC President Ursula von der Leyen said last week: “We are able to receive LNG from other suppliers worldwide. I’ve created a partnership for energy security with [US] President Biden. We have spoken to many different LNG suppliers worldwide who are very interested in going into the gap that Russia would leave.”
EC energy commissioner Kadri Simson has held talks with LNG powerhouse Qatar and Azerbaijan supplier to the Southern Gas Corridor this month, while Japan has also pledged to offer Europe surplus LNG cargoes.
