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Business News

Vitol signs 10-year deal to buy Nigeria’s LNG

Vitol will increase the volume of its Liquefied Natural Gas after signing a 10-year agreement with Nigeria Liquefied Natural Gas (NLNG). #VITOL #NLNG

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Vitol signs 10-year deal with NLNG as market rivals ramp-up 

Vitol has signed a 10-year deal with Nigeria Liquefied Natural Gas (NLNG) to boost the volume of its Liquefied Natural Gas by 500,000 tonnes per annum from 2021.

While the financial details of the deal weren’t disclosed, the deal would help NLNG remarket volumes from existing production lines at its Bonny Island plant with a number of contracts is due to expire.

Vitol’s deal with NLNG is somewhat a response to competitors’ activities in the market. Commodity companies like Trafigura and Gunvor, are reportedly increasing their traded spot cargo volumes with multi-year LNG deals as well.

NLNG

Speaking on the ten-year deal, Vitol stated, “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.”

According to Reuters in a report, NLNG will provide shipping for the cargoes as Vitol 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 December 11 and will start in October 2021.

[READ MORE: FG signs deal with Japanese Group to tackle problems in agriculture]

NLNG, not the only Vitol dealer: Before the deal with NLNG, it was learned that since 2018, United State producer Cheniere and the trading arm of Russia’s Gazprom, Gazprom Marketing & Trading have been selling long-term volumes to Vitol like the NLNG deal.

Deal book 300 x 250

Meanwhile, the Vitol deal is coming at a time other NLNG contracts are winding up. According to the International Group of LNG Importers (GIIGNL), NLNG has contracts with Turkey’s Botas, Portugal’s Galp Energia, Spain’s Naturgy and France’s Total worth 2.67 million tonnes per year, and the contract will expire in 2020 and 2021.

Meanwhile, Nairametrics had reported that the delay on the part of the Nigerian government forced Vitol, to pull out of an acquisition talk involving two Nigerian oil fields.

Vitol was among a consortium interested in buying the Nigerian oil fields from Brazil’s Petrobras but the former has now backed out of the deal.

Vitol is not the only company from the consortium to quit, according to a report. Delonex Energy also pulled out of the deal. The Nigerian oil fields are owned by Petrobras, which is willing to sell, with the deal almost at the conclusion stage.

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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