LNG Disruptions in Nigeria and Egypt Seen Curbing Shipping RatesIsaac Arnsdorf
Disruptions to the supply of liquefied natural gas in Nigeria and Egypt will curb shipping rates as more vessels compete for fewer cargoes of the fuel, according to DNB Markets.
“The market is supply-driven, hence the availability of volumes into the market is going to drive rates,” analysts led by Nicolay Dyvik in Oslo said in an e-mailed report today. “Dedicated vessels for these projects with outages are reportedly made available to the market, hence this is likely to put pressure to LNG spot rates.”
Egypt stopped supplying natural gas to the Segas LNG plant because of rising domestic demand, Sherif Haddara, chairman of state-run Egyptian General Petroleum Corp., said Feb. 12. Nigeria LNG last week canceled an offer to sell an LNG cargo, according to two people with knowledge of the tender. Royal Dutch Shell Plc declared force majeure on gas supplies to Nigeria LNG as of Feb. 5 after a pipeline leak, according to a statement Feb. 8.
Force majeure is a legal step freeing a company from meeting contract terms for reasons beyond its control.