Despite declaring force majeure owing to significant flooding, Nigeria LNG Limited (NLNG) has not yet cancelled any liquefied natural gas (LNG) cargoes, according to two persons familiar with the issue who spoke to Reuters.
According to the sources, the force majeure declaration was made as a preventative measure to safeguard the business and notify its clients in case the flooding persisted for an extended period of time and affected loadings.
One said, “The gas supply has not yet stopped.
Unforeseen external events are referred to as “force majeure” when they prevent one party from performing under a contract.
The outage, another supply shock in a constrained LNG market, analysts at Rystad Energy said, jeopardized approximately 4% of the world’s supply at a time when Europe is suffering from the lack of Russian pipeline gas.
Europe needs Nigeria’s LNG to keep flowing, and Portugal’s Galp has warned that it will be difficult to substitute Nigerian supplies.
On Wednesday, Galp declined to comment when asked if any of its shipments had been postponed.
With a 22 million tonne annual production capacity, NLNG claimed floods had “significantly disrupted” its gas supply but would not confirm whether it had cancelled cargoes.
A spokesman stated in an email that “NLNG continues to investigate mitigations with its buyers.”
The Delta, Bayelsa, and oil- and gas-producing states of Rivers, according to Nigerian authorities, are all at risk of flooding through the end of November.
More than 600 people have already died as a result of flooding brought on by torrential rains and a water release from a dam in Cameroon.