Adebayo Obajemu (with agency report)
Investigations have revealed that Nigeria LNG Limited (NLNG) is yet to cancel any liquefied natural gas (LNG) cargoes despite declaring force majeure due to heavy flooding.
The sources within the company told Business Hallmark that force majeure declaration was a necessary, pre-emptive measure to protect the company, and give its clients notice, if the flooding continued for much longer, and did impact loadings.
A source said “the gas supply is yet to stop.”
It should be noted that a force majeure refers to a spinning of unexpected external circumstances that prevent a party to a contract from meeting obligations.
Analysts Rystad Energy said the disruption – another supply shock in a tight LNG market – threatened nearly 4% of global supply just as Europe is reeling from the absence of Russian pipeline gas
The continued flows of Nigeria’s LNG is crucial for Europe; Portugal’s Galp has warned it would struggle to replace Nigerian cargoes.
Galp declined to comment on Wednesday on whether any of its cargoes were cancelled.
NLNG, with a production capacity of 22 million tonnes per annum, said flooding had caused “significant disruption” to its gas supply, but would not say whether it had cancelled cargoes.
“NLNG continues to explore mitigations with its buyers,” a spokesperson said in an email.
Nigerian authorities said states including oil and gas producing Rivers, Bayelsa and Delta were at risk of flooding until the end of November.