"A five-year supply tender for up to 30
Nigeria LNG cargoes from October 2015
closed on 5 March attracting a wide range
of bids that can be used as a yardstick for
the global LNG forward curve.
The value of cargoes on offer from Lisbon-based
Nigerian offtaker, Galp Energia, were widely deemed to
be backwardated over the period. Most traders attached
a premium over the 2015-2016 period in accordance
with expected liquefaction delays in Australia, while the
consequent onset of export ramp-ups both in Australia
and the USA from 2017-2020 saw lower-valued cargoes
at the back end of the period.
Traders were required to submit a single bid for either
the entire 30 cargoes over the 2015-2020 period or for
specified sub-sections of the lifting period. The pricing
behind all bids had to be made at a 10.5% index to Brent
crude oil plus a constant. The constant is understood to
be Galp’s margin on its NLNG agreement.
While Galp will be keenly aware of a recent tender award
for 2014-2015 Nigeria cargoes settling at 14-14.5% Brent,
one trader said it may turn down a comparable bid for its
near-term string, preferring instead to go for a lower-value
bid that stretches over the entire period or just the back
end towards 2020.
On the sell side, Galp - which expects to receive equity LNG
from Mozambique by the end of the decade, may do well to
lock in forward value in today's relatively under-supplied
global market".
"As it becomes very difficult to assess the market
beyond 2016, the trader explained he could only put in a
conservative bid to cover cargoes from 2017-2020".
Source: ICIS
Nigeria LNG cargoes from October 2015
closed on 5 March attracting a wide range
of bids that can be used as a yardstick for
the global LNG forward curve.
The value of cargoes on offer from Lisbon-based
Nigerian offtaker, Galp Energia, were widely deemed to
be backwardated over the period. Most traders attached
a premium over the 2015-2016 period in accordance
with expected liquefaction delays in Australia, while the
consequent onset of export ramp-ups both in Australia
and the USA from 2017-2020 saw lower-valued cargoes
at the back end of the period.
Traders were required to submit a single bid for either
the entire 30 cargoes over the 2015-2020 period or for
specified sub-sections of the lifting period. The pricing
behind all bids had to be made at a 10.5% index to Brent
crude oil plus a constant. The constant is understood to
be Galp’s margin on its NLNG agreement.
While Galp will be keenly aware of a recent tender award
for 2014-2015 Nigeria cargoes settling at 14-14.5% Brent,
one trader said it may turn down a comparable bid for its
near-term string, preferring instead to go for a lower-value
bid that stretches over the entire period or just the back
end towards 2020.
On the sell side, Galp - which expects to receive equity LNG
from Mozambique by the end of the decade, may do well to
lock in forward value in today's relatively under-supplied
global market".
"As it becomes very difficult to assess the market
beyond 2016, the trader explained he could only put in a
conservative bid to cover cargoes from 2017-2020".
Source: ICIS
