The Insecurity in Niger Delta has started taking its tolls on Nigeria Liquefied Natural Gas NLNG) as concerns are raised about the company’s ability to meet the volume of gas due to its customers.
Because of insecurity which has led to the shutting down of major pipelines, including gas pipelines, feed gas that the company requires for its production is in short supply, and thereby reduces its ability to meet its obligations to customers.
Of particular interest is the fear raised whether Portugala major customer of the company would be able to get the volume of gas due it, from NLNG
Should the company unable to deliver what is due to its. customers, revenue expected from its operations to the federation account would be adversely affected.
Over the years the NLNG has been one of the dependable sources of revenue to the federal government as it gives it mouth watering dividends, aside from taxes and others paid by the company.
Responding to an enquiry over this development, Andy Odeh, General Manager, External Relations and Sustainable Development, he said: “NLNG is experiencing decreasing LNG output as a result of a shortfall in feed gas resulting from upstream gas supply challenges.
NLNG is guided by the provisions of the various agreements with buyers, and operational difficulties are managed in accordance with these provisions.”
According to Reuters, Portugal could face supply problems this winter if Nigeria does not deliver all the liquefied natural gas (LNG) it is due to, the European Union country’s environment and energy minister said on Monday.
Asked whether with many countries now looking for alternatives to Russian gas there was a chance that Nigeria might not meet its LNG supply volumes, Duarte Cordeiro said that while the government had given Lisbon assurances that it would do so, “there is a risk of it not complying”.
“From one day to another, we may have a problem, such as not being supplied the volume of gas that is planned,” Cordeiro told a conference in Lisbon hosted by CNN Portugal.
Cordeiro did not say what would prevent Nigeria supplying the LNG it was contracted to.
Oil and gas output in Nigeria has been throttled by theft and vandalism of pipelines, leaving gas producer Nigeria LNG Ltd’s terminal at Bonny Island operating at 60% capacity.
Nigeria LNG, which is owned by state-oil company NNPC Ltd, Shell, TotalEnergies and Eni, did not immediately respond to a request for comment.
Although Portugal has its gas reserves at 100% of storage capacity, Cordeiro said that if fewer Nigerian LNG deliveries materialised, it would have to look for alternative supplies.
With other European countries doing the same, this would likely lead to higher imported gas prices, he said.
Portugal last year imported 2.8 billion cubic meters of LNG from Nigeria, or 49.5% of total imports, while the United States was the second-largest supplier with a share of 33.3%.
Its other suppliers include Trinidad and Tobago, Algeria, Qatar and Russia, the latter accounting for just 2% last year.
Portugal is “diversifying its suppliers to increase the country’s energy security”, Cordeiro said, adding that it is adopting strategies to lower gas consumption, while boosting its already high production of electricity through renewables.
“Portugal has been preparing, like all of Europe, for what will be a difficult winter,” he said, urging the European Commission to move forward with the implementation of a joint gas purchasing platform and defining import prices.
