Portugal’s Environment and Energy Minister, Duarte Cordeiro said yesterday, his country could face supply problems in December, if Nigeria does not deliver all the Liquefied Natural Gas (LNG) it expects.
Cordeiro said that while Nigeria had given Lisbon assurances that it would do so, “there is a risk of it not complying”. This is considering the many countries now looking for alternatives to Russian gas, there is a chance that Nigeria might not meet its LNG supply volumes.
“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, Portugal.
Cordeiro did not say what would prevent Nigeria supplying the LNG it was contracted to, however, oil and gas output in Nigeria has been declining due to theft and vandalism of pipelines, leaving gas producer Nigeria LNG Ltd’s terminal at Bonny Island operating at 60 per cent capacity.
Although Portugal has its gas reserves at 100 per cent of storage capacity, Cordeiro said that if fewer Nigerian LNG deliveries materialised, it would have to look for alternative supplies.
This is likely to lead to higher imported gas prices since other European countries are doing the same.
Portugal last year imported 2.8 billion cubic meters of LNG from Nigeria, or 49.5 per cent of total imports, while the United States was the second-largest supplier with a share of 33.3 per cent.
Its other suppliers include Algeria, Qatar, Trinidad and Tobago, and Russia.
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.
Meanwhile, the Organisation of Petroleum Exporting Countries (OPEC) fell a whopping 3.6 million bpd below its oil production target in August, with the gap widening from 2.9 million bpd in July.
Russia and Nigeria were the two biggest laggards of their respective groups, and OPEC+ will likely fall even further behind its production quotas in September.