Nigeria re-strategize LNG supply boost amid price slump

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Nigeria plans to keep its liquefied natural supply at current levels despite prices near record lows, the opposite of what exporters from the U.S. to Australia are doing.

State-owned Nigeria LNG Ltd. plans to continue utilization levels and may even boost exports in August and September depending on demand, according to a person with knowledge of the strategy. The country exported over 1.8 million tons last month, higher than last year’s monthly average of 1.7 million, according to ship-tracking data compiled by Bloomberg.

A spokesperson for Nigeria LNG didn’t immediately comment on the plans.

Most of the world’s suppliers curbed deliveries in June as measures to contain coronavirus slashed gas consumption, with global exports down 6.3% from the previous year. Only a handful of exporting countries, including Qatar and Algeria, have been able to boost output.

Some of Nigeria’s buyers have exercised clauses in their long-term contracts, that allow them to take fewer shipments than originally agreed. The firm has been able to sell that excess supply into the spot market, but usually at a discount.

More than half of Nigeria’s exports in May ended up in Asia, compared with less than a third last year, according to ship-tracking data.

Production costs at Nigeria’s Bonny Island facility are so low that it can still turn a profit amid weak spot prices, said the person who asked not to be identified because the plans are private. The facility has among the lowest costs in the world, according to data from Sanford C. Bernstein & Co.

“Access to the market and shipping costs obviously is something that is going to be very important for all the major players,” Sara Vakhshouri, founder and president of consulting firm SVB Energy International, said on a webinar Wednesday. “Lower liquefaction costs, feedgas” also matter.

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Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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