Nigeria’s LNG export to East Asia falls

Nigerian Liquefied Natural Gas was exported to a wider range of destinations last year, Eclipse data showed, with less material being sent to East Asia following a steep decline in Japan/Korea Marker prices, partly as a result of new liquefaction capacity in Asia Pacific.

LNG exports fell 2.3 per cent to 42.49 million cubic meters, with exports to East Asia accounting for 34 per cent of the total, down from 48 per cent in 2014 as the Platts JKM spot marker fell to $5.79/MMBtu at the end of 2015 from $18.98/MMBtu in January 2014. Eclipse is an analytics unit of Platts.

On a quarterly basis, the drop in JKM prices yielded a 0.81 correlation to Nigerian exports to East Asian buyers, according to Platts.

Meanwhile, exports to the Middle East last year rose 203 per cent, with European imports up 22 per cent to 8.22 million cu m.

New liquefaction capacity in the Pacific added further fundamental pressure to Nigerian export levels, with East Asian imports from other Pacific producers accounting for 52 per cent of imports last year, up from 46.4 per cent in 2014.

Since the beginning of 2014, total liquefaction capacity in the Asia Pacific region rose 33.6 per cent, with 34.80 million mt/year of new capacity coming online.

Australian projects added 24.80 million mt/year of this capacity, while new facilities in Papua New Guinea and Indonesia provided 6.9 million mt/year and 2.1 million mt/year respectively.

In contrast, Atlantic liquefaction capacity remained relatively stable, with only the 4.70 million mt/year Arzew LNG facility in Algeria coming online.

However, the opening of the 22.50 million mt/year Sabine Pass liquefaction facility in the US will increase Atlantic capacity by 44.7 per cent, with new facilities also opening in Australia.

Several market sources said additional capacity in the US would put pressure on European prices and Nigerian cargo sales, citing low Henry Hub gas prices and reasonable freight rates to deliver US cargoes to other Atlantic destinations. 



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