Angola LNG Signs Flexi Deal with EDFT
Angola LNG has entered into a "flexible sales arrangement" with EDF Trading, the London-based arm of French power giant EDF, but neither has given any indication of the likely volume to be supplied.
It covers the delivery of "multiple cargoes from 2016 through to 2018" on a "delivered ex-ship" basis, their statement said. This means Angola LNG, which has a dedicated fleet of seven LNG carriers, will be responsible for shipping any cargoes to their destination.
Angola LNG Marketing CEO Artur Pereira said: “This marks an important milestone for Angola LNG as it re-enters the market.” His counterpart at EDFT John Rittenhouse added: “We will be working closely with Angola LNG to optimise the LNG through the European wholesale market.”
Spot prices for LNG globally are currently depressed in the $4-$4.50/mn Btu range, owing to a world supply glut, with Europe the market of last resort.
Angola LNG was built at a cost of $10bn and has an export capacity of 5.2mn metric tons/yr, plus additional export volumes of LPG and condensate, and some gas for the local market in the country's Soyo province. It delivered its first LNG cargo in July 2013 -- to Rio de Janeiro in Brazil for Petrobras -- but had an intermittent start plagued by technical faults. In April 2014 a rupture of its flare line forced it to shut for two years for substantial repairs, the cost of which has not been divulged.
Lead partner Chevron now expects the plant to resume exports in the second half of this year. It's hoped that the venture will help Angola reduce its 7bn m3/yr gas flaring.
The EDFT arrangement may be Angola LNG's first formal trading agreement, but it cannot be described as a long-term contract as it appears to treat the buyer more as a partner than as a counterparty with fixed offtake obligations.
Petrobras had been reported to be talks for a such a term offtake two years ago, but that was shortly after Angola LNG had to close for its protracted repairs.
Shareholders of Angola LNG are state Sonangol 22.8%, Chevron 36.4%, with BP, Eni and Total each holding 13.6% equity. Angola LNG Marketing shareholdings are different, with Sonangol understood to hold 50%.
In 2014 Angola LNG exported just 330,000 mt -- 130,000 mt to China, 70,000 mt each to Brazil and South Korea, and 60,000 mt to Japan -- according to the International Group of LNG Importers (GIIGNL). That's believed to represent just six cargoes, or 6% of Angola LNG's annual export capacity.
Mark Smedley