Nigeria Set to sell two LNG Cargoes … as traders seek clarity about Nigerian oil output

Chinazor Megbolu |

The Nigeria Liquefied Natural Gas (NLNG) and Angola’s LNG project is set to sell three cargoes of liquefied natural gas in the international market despite a drop in the price of crude oil.

In a statement obtained from Energy Mix Report, it disclosed that the NLNG is offering two cargoes by May, while Angola will be offering one in June 2020.

It also added that the average LNG price for June delivery into northeast Asia LNG-AS is estimated at around $1.95 per million British thermal units (mmBtu) about $0.35 per mmBtu lower than the estimate previous week.

“The LNG price drop has been attributed to sellers around the world flooded the market with cargo offers, while demand remained subdued amid coronavirus-related lockdowns.

“A wave of supply tenders has hit the market as a number of buyers are rescheduling long-term deliveries, leaving suppliers with excess cargoes.

“There’s some flexibility in long-term contracts. If the long-term buyer nominates (volumes) down, then the surplus cargoes are offered on the spot market,” the statement said.

However, the document further explained that there were also tenders from usual sellers of spot cargoes, traders said.

Meanwhile, traders are seeking clarity about the Nigerian oil output.

The market participants awaited concrete plans on Nigerian crude oil output for May and June 2020 as the state oil company was in discussions with local firms and international majors on how to rein in supply amid a production cut pact and poor sales.

Trading sources said Nigeria’s Nigerian National Petroleum Corporation (NNPC) was communicating with international firms on how to reduce output to align with an
unprecedented producer cut pact.

The statement said that May official selling prices and June export programmes were delayed pending a resolution to the issue, and traders offered contending accounts of how advanced discussions were.

“A possible crux to the talks revolved around whether producers in Nigeria would comport to an across-the-board cut or more of a burden would be saddled by offshore fields, in which the NNPC is not as exposed,” the statement said