LNG makes up Portugal’s entire gas supply in April

LNG imports made up Portugal's entire gas supply in April as the country did not import any pipeline gas, amid record-low demand owing to the Covid-19 pandemic.

Portuguese LNG import totalled around 345,000t in April, broadly in line with volumes absorbed a year earlier, official data show. April volumes were also in line with imports in March but down from the February peak (see chart) .

Portugal did not import any Algerian gas from Spain in April, resulting in LNG imports accounting for 100pc of Portugal's gas supply over the month. The country was instead a net gas exporter to Spain in April, exporting around 17 GWh/d, with flows towards Spain at the quickest for any month since at least October 2011. Portugal had largely been a net importer from Spain in previous years (see chart) , as the country has no direct pipeline connection with Algeria.

Portuguese firm Galp receives Algerian gas under a 2.3bn m³/yr pipeline supply contract with Sonatrach, which expires this year. The two firms agreed the terms of a new 10-year term supply contract for 2.5bn m³/d last year .

Nigeria and the US were Portugal's only LNG suppliers in April, delivering three cargoes each to the 4mn t/yr Sines terminal. The US deliveries came from Sabine Pass, Corpus Christi and Cove Point.

All US cargoes delivered to Portugal were likely secured on the spot market. Portuguese utility EDP has a 20-year supply agreement for LNG from Corpus Christi, but this will only start when the third liquefaction train starts commercial operations. The firm issued a tender in early March , which included requirements from one cargo for delivery in April. Galp also has a contract for 1mn t/yr of US LNG from the Calcasieu Pass facility , which is expected to start commercial operations in 2022.

Galp also has offtake from trains 1-5 of Nigeria's 22mn t/yr Bonny Island liquefaction facility totalling around 2.4mn t/yr, under three long-term contracts expiring between this year and 2026. The firm signed a new 10-year deal with its Nigerian supply in February, which will replace the existing contract for offtake from trains 1-3.

Gas consumption hits record low Portuguese gas demand fell to 11.1mn m³/d in April from 15.5mn m³/d a year earlier, reaching the lowest level for any month since at least January 2015.

The fall was mainly the result of weaker power sector demand, which fell by around 64pc on the year, while aggregate industrial and residential demand were broadly stable on the year. The fall in gas demand echoed trends in much of Europe since late March as a result of restrictive measures aimed at containing the spread of the coronavirus pandemic.

Stronger renewable output may have also curbed the call on thermal power plants, with Portugal's thermal generation falling almost fivefold on the year. Hydroelectric generation rose to 40.2 GWh/d in April from 24.5 GWh/d a year earlier, although this was largely offset by wind output slipping to 30 GWh/d from 39.3 GWh/d.

But a fall in coal burn was the biggest contributor to the drop in Portuguese thermal generation — Portugal did not generate any coal-fired output in April, down from 16.3GWh/d in the previous year (see table) .

By Livia Gallarati

Portuguese power generation GWh/d Apr 20 Apr 19 Electricity consumption 116.8 132.6 Thermal generation 6.4 36.3 — Gas-fired generation 6.6 20.1 — Coal-fired generation 0.0 16.3 Hydrolectric generation 40.2 24.5 Wind generation 30.0 39.3 Solar generation 3.1 2.9 — REN

Portugal's LNG imports '000 t

VIP Iberico deliveries GWh/d

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