By Prince Okafor
Dutch energy and commodity trading company, Vitol, Thursday, signed a 10-year deal with Nigeria Liquefied Natural Gas, NLNG, to purchase 500,000 tonnes of LNG per year.
This deal indicates the company’s move in ramping up its long-term presence in the market.
The price of LNG purchased under the deal is yet to be disclosed, however, spot Asian LNG and European gas prices are trading at their lowest level in at least a decade this winter.
Vitol, Trafigura and Gunvor, are increasingly expanding their traded spot cargo volumes with multi-year LNG deals as a global push for cleaner energy helps the market grow and mature.
According to a statement by Vitol, “The agreement underscores NLNG’s drive…to deliver LNG on a global scale in a low carbon world where gas/LNG will continue to be the preferred complementary energy source alongside renewable.”
The company stated that, it would purchase volumes from Trains 1, 2 and 3 of a six-train NLNG production facility on Bonny Island under the sales and purchase agreement, which was signed on Dec. 11 and will start in October 2021.
It was gathered that, NLNG will provide shipping for the cargoes.
The deal also helps NLNG remarket volumes from existing production lines at its Bonny Island plant with a number of contracts due to expire.
NLNG’s contracts with Turkey’s Botas, Portugal’s Galp Energia, Spain’s Naturgy and France’s energy major Total for a total of 2.67 million tonnes per year will expire in 2020 and 2021, according to the International Group of LNG Importers (GIIGNL).
NLNG has also been looking for buyers for volumes from a yet-to-be-built Train 7.
Vitol has also been buying long-term volumes from U.S. producer Cheniere and the trading arm of Russia’s Gazprom, Gazprom Marketing & Trading, since 2018.