Natural gas: which companies import to Portugal, from where and how?
Ukraine in Ukraine has led several to the war to announce a severing of ties with Russia, although it remains to be seen how they will go. In the case of Portugal, in the case of an exhibition in Portugal, in the case of our tribute, let’s be sure that three years ago. There are four large companies that are importing gas to Portugal, namely Galp, EDP, Endesa and Naturgy. But where do you source your supplies? And how has this gas contracting evolved over time?
Let’s start with the big numbers: Portugal continues to have its biggest source of natural gas in Nigeria. Ships come to us, mainly through the long-term contracts that Galp signs or an African country. Several years will open the door to the reinforcement of liquefied gas works in the coming years or in other US geographies.
But exposure to Russian gas, which was nil in the records of REN – Redes Energéticas Nacionais until 2018, has risen in the last three years, corresponding to 3.2% of Portuguese supplies in 2019, 8% in 2020 and 14.6% in 2021.
REN’s data show in recent years a substantial reduction in land acquisitions, through the interconnections with Spain, reflecting a lower exposure of our system to Algerian gas. This North African producer was mainly offset by an increase in this growth in liquefied natural gas NG (in the United States of America), also with the aforementioned increase in imports to Russia.
Equally evident in REN’s figures is that Qatar (another leading international producer) has been losing ground in the supply of natural gas to Portugal. Its weight has dropped in 2021 to a third of what it was in 2018.
This reflects the free functioning of the market and the different commercial strategies of companies that import gas to Portugal. A part of the energy contract to complement the term, where the long term is imported under gas contracts for energy contracts to complement its long term, but trying the risk of transiting in gas purchase companies (but for purchases) during periods of strong international demand for gas). Let’s start with the largest of the companies that sell gas in Portugal, Galp Energia.
Galp Energia
Galp’s final report and accounts detailing the company’s gas supply is for 2020 and the company reported that 46% of the gas it purchased came from Nigeria, by ship, 1% was on the market place [mercado diário, sem contratos de longo prazo] of LNG, 32% on the market place of natural gas (via pipeline) and 21% came from Algeria (via pipeline).
The long-term contracts that Galp had through the pipeline from Algeria (with the Algerian Sonatrach as supplier) expired last October, in 2019 the Portuguese oil company signed a new contract with Sonatrach valid for five years, under which the Galp continues to buy gas from Algeria (billion cubic meters per year) for delivery to the Iberian Peninsula.
The largest volume of distribution for Galp continues to be ensured by Nigeria. There are two contracts still in force with this African country: one started in 2003 and runs until 2023, covering the supply of 0.73 million tons per year; the other arrangement in 2006 and ends in 2026, for 1.42 million tons per year. Both provide supplies at the Bonny Island charging point in Nigeria. REN’s LNG in terms of the destination of a large part (or all) of the gas, although the terms of the contract (and the margin for this to be diverted to other stops) are gas terms, these gas terms will be diverted to other stops.
One of the ships that transports LNG from Nigeria (although it was not possible to determine whether it operates for Galp or another importer) is the LNG River Niger, which this Monday, February 28, docked in Sines, unloading liquefied gas, having left the port of Alentejo this Tuesday afternoon, back to Bonny. She is a 288 meter long ship, built in 2006, and flying the Bermuda flag.
The most recent one with Nigeria dates from 2020, when Galp committed to purchase one million tonnes per year of LNG from Nigeria LNG Limited for 10 years, starting in October 2021.
Additionally, from 2023 onwards, Galp will purchase one million tonnes per year of LNG from the American company Venture Global LNG, in a 20-year contract (which coincides with the end of the beginning of the contracts currently in force with Nigeria). Venture Global LNG this week announced its first LNG shipment, but for a different customer.
EDP
The Portuguese electric company is another of the main importers of natural gas to Portugal, not only to supply its gas customers in the domestic and business segments, but also to supply its gas-fired combined cycle plants (which operates in Portugal and Spain). .
In its 2020 report and accounts, EDP does not provide details on gas supply (it does in relation to coal, indicating that in that year 100% of its coal was purchased in Colombia).
However, the data released by GIIGNL international GIIGNL, indicate that the international association of LNG importers 2003 indicates that a contract of 0.74 million tons per year to import LNG from Point Fortin, in Trinidad and Tobago, valid 2023 , although you have received a replacement whereby the Spanish company Naturgy acquires those volumes until the end of the contract.
But EDP is part of a group of buyers (which includes, among others, the EDF and Endesa groups) that are also acquired LNG in the US from the North American Cheniere. The Portuguese electric company announced to the market in 2014 that it had contracted to acquire LNG for 20 years (starting in 2020) at an annual rate of one billion cubic meters (1 BCM) of gas from a Cheniere project in Texas.
At the end of 2021, EDP announced the end of its 14-year commercial agreement with Algerian Sonatrach (also a gas supplier to Galp).
endesa
The Spanish electric company is another of the gas importers to Portugal. Its executive president in Portugal, Nuno Ribeiro da Silva, assured the Express which company imports gas from Russia, non-US supplies as one of the supply sources.
According to the international LNG import association, Endesa has a gas contract with Nigeria (0.75 million tons per year), starting in 2006 and expiring in 2026, another with the North American Cheniere (2.25 million tons per year), starting in 2019 and ending in 2039, and a contract with Qatar (0.75 million tons per year) since 2005 and running until 2025.
Spain, the data published by that association did not allow which parts of the three contracts (Nigeria, USA and Qatar) are destined for Portugal and which parts are parties.
Nature
The Spanish company Naturgy (formerly Gas Natural Fenosa) is the second largest supplier of natural gas in Portugal, only behind Galp, according to information from the Regulatory Authority for Energy Services (ERSE) for November.
It is, according to information collected by the Express, the company responsible for delivering the first cargo of Russian gas to Portugal from Russia’s attack on Ukraine, via the ship Vladimir Vize, which is scheduled for March after Sines next Friday, March 4th. Expresso questioned the company about this operation and whether it has more downloads scheduled or if it intends to suspend as yet from Russia, but received no answers.
O place of Naturgy indicates that in natural gas the group manages a portfolio of 28 billion cubic meters (28 BCM, equivalent to more than five times the annual consumption of gas in Portugal), with projects in Algeria, Puerto Rico and Oman.
GIIGNL’s latest annual report, published last and with data on contracts that were in force until 2020 (only for November, not including gas transported via pipeline), indicated that Naturgy sources its supplies from Russia, Australia, Egypt, Egypt , Nigeria, Trinidad and Tobago, USA, Qatar, Oman and Puerto Rico.
This provisioning aims at the delivery of gas in different differences in which Naturgy is present and also at the management of geographic portfolios of contracts for third parties, in which the Spanish company centralizes the purchases of gas, but then the redistribution of energy by different companies of companies of Spanish.
In the case of Russia, Naturgy is one of five buyers who agreed in 2018 to buy gas from Russia’s Yamal LNG, from the Sabetta production unit in northern Russia. Naturgy, but also French, CNPC, Gazprom and Novatek have contracts valid until 2038. Total also started a contract in 2018, but with an expiry date in 2032. Naturgy’s contract is for 2.5 million tons per year, with impossible to know which part is reserved for Portugal.
In the case of Nigeria, Naturgy will also get its gas from Bonny Island (and from the same production unit that serves Galp), with the commitment to purchase 1.99 million tonnes per year. It is a contract that started in 2022 and ends in 2024.