Houston-based consulting firm Waterborne Energy has reported that ongoing production challenges at Sonatrach’s ageing Algerian LNG complex have played a role in the recent global spike in LNG prices.
According to news service EnergyCurrent, an incident at the plant and reduced production output since then has further contributed to the tight global supply situation and price hikes.
In April it was reported that production would be reduced at Arzew due to scheduled maintenance, said Steve Johnson, President of Waterborne.
“We later learned of an incident at the complex in early June that was expected to significantly reduce LNG output further for up to three weeks. However, Waterborne in-house production tracker discovered that production remained significantly hampered at Arzew through September.”
“A closer look at the numbers suggests that production from Algeria has been averaging roughly 55 Bcf per month since June. This was an unexpected decrease in production of about 21 Bcf per month,” explained Johnson.
With the tight global supply conditions experienced at present, any LNG production outage is amplified and a loss of up to seven tankers per month is significant in any environment, according to Waterborne’s Johnson.