Portuguese multinational energy corporation, GALP, has admitted the cancelation of another liquefied natural gas [LNG] delivery from Nigeria, originally scheduled for the end of October. The cancellation became necessary because of the floods that are ravaging parts of the Niger Delta, including the terminals of major oil companies.
It will be recalled that on October 18, Nigeria’s LNG company export facility declared force majeure on its supplies citing disruption by the recent flooding in Delta stated id to its feed gas suppliers’ production.
Force majeure absolves companies from liabilities of contractual obligations due to factors outside their control.
In view of the foregoing, GALP said it had in the interim, ensured the acquisition of some volume from other markets, even as it did not foresee any other cancellations from Nigeria.
The Portuguese multinational assured that Nigerian gas supply issues will not significantly impact energy bills and supplies as Galp will be buying gas elsewhere to meet its contractual obligations.
“What is important to clarify is that Galp will have to buy gas on the market, naturally, to satisfy its customers and its legal responsibilities with the regulated tariff,” environment and climate action minister, Duarte Cordeiro said.
Speaking to Portuguese journalists in Luxembourg at the end of a meeting of EU energy ministers, Cordiero said Europe is “in a phase in which the price of gas has fallen; because many countries have their storage filled and, therefore, there is more supply than demand, so the price has been falling.
“I doubt the impact will be very significant because gas prices are much lower than they were and have been very low in recent days,” the minister, said when asked about possible impacts on customers’ bills.
The minister stressed, in addition, that Portugal had adopted a “series of measures to prepare for winter,” such as betting on gas storage, renewable energy and campaigns to encourage savings in consumption.
“Measures that, as a whole, protect us,” he said, adding that reserves are at the level of a month and a half.
In a report yesterday, EUROACTIV Intelligence recalled that in mid-October, Nigeria LNG Limited had warned Galp of “a substantial reduction in production and supply of liquid natural gas” due to rains and floods in Nigeria, which could put supply in Portugal at risk.