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UPDATE 1-Vitol signs 10-year deal to buy Nigeria's LNG from 2021

Published 12/12/2019, 11:00
Updated 12/12/2019, 11:09
© Reuters.  UPDATE 1-Vitol signs 10-year deal to buy Nigeria's LNG from 2021

© Reuters. UPDATE 1-Vitol signs 10-year deal to buy Nigeria's LNG from 2021

(Adds detail, background)

By Ekaterina Kravtsova

LONDON, Dec 12 (Reuters) - Commodities trader Vitol

VITOLV.UL has signed a 10-year deal with Nigeria Liquefied

Natural Gas (NLNG) to buy 500,000 tonnes of LNG per year,

ramping up its long-term presence on the market.

Commodity houses, including Vitol rivals Trafigura

TRAFGF.UL and Gunvor GGL.UL , 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.

"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

renewables," Vitol said in a statement.

The deal also helps NLNG remarket volumes from existing

production lines at its Bonny Island plant with a number of

contracts due to expire.

Vitol said 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.

NLNG's contracts with Turkey's Botas, Portugal's Galp

Energia GALP.LS , Spain's Naturgy NTGY.MC and France's energy

major Total TOTF.PA 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 will purchase volumes on an delivered-ex-ship basis,

meaning NLNG will provide shipping for the cargoes.

The price of LNG purchased under the deal has not been

disclosed but spot Asian LNG and European gas prices are trading

at their lowest level in at least a decade this winter.

Vitol has also been buying long-term volumes from U.S.

producer Cheniere LNG.A and the trading arm of Russia's

Gazprom, Gazprom Marketing & Trading GAZP.MM , since 2018.

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