Shell’s suspension of liquefied gas supply reduces Nigeria’s intake by 50%- NLNG
The Nigeria LNG has said that the Force Majeure announced by Shell Petroleum Development Company of Nigeria Limited (SPDC) on its gas supplies would significantly reduce its total gas intake to about 40-50 per cent of the usual volume.
SPDC Joint Venture is currently supplying feedgas to NLNG from a number of its oil fields in the Niger Delta, including the Gbaran/Ubie plant, which commenced operation in June 2010, with a production capacity of about one billion cubic feet of gas per day (BCF/D).
General Manager, External Relations of the Nigerian gas company, Kudo Eresia-Eke, said in a statement on Thursday that SPDC had informed the NLNG management that the shutdown of gas production at its Gbaran/Ubie Gas Plant last Tuesday would last indefinitely “until the source of the leak is identified and necessary remedial actions are completed by SPDC, to ensure safe operation.”
“We do not know how long it would take for the problem to be resolved. But, what I know is that the partners have the capacity to ensure that it would not take too long. To guess on the period it would take would be dangerous,” he said.
According to Mr. Eresia-Ekeh, the NLNG is working with SPDC and its other gas suppliers to seek mitigation measures to the problem, saying the closure of Gbbaran/Ubie gas production plant, which has been the normal source of gas supply to the company in Bonny Island, would result in the reduction of supply from its Soku gas plant usually used as alternative route for a limited period before total shutdown.
The General Manager assured that the development would not have any impact on gas supply to the domestic market. He also noted that NLNG has so far delivered over 3,000 liquefied natural gas (LNG) and natural gas liquids (NGLs) cargoes to its customers abroad from the 22.5 million tonnes per annum (MTPA) capacity plant at Bonny, Rivers State.
“The current situation would not have any impact on the supply of gas to the domestic market. Therefore, domestic gas consumers have no reason to fear. The point is that NLNG usually have gas shipped to Lagos into reserves for dedicated off-takers to collect and distribute. The challenge has always been the lack of capacity by the off-takers to exhaust the reserve. So, Nigerians must be assured that they have nothing to be afraid of,” Mr. Eresia-Ekeh said.
The SPDC had announced that that gas supplies to Nigeria LNG would be suspended till further notice as it may not be able to meet its contractual obligations as a result of closure of its major supply pipeline following a reported leak along the Eastern Gas Gathering System (EGGS-1) right-of-way (RoW) near Awoba in Rivers State.
Shell is a major partner to the NLNG project, through its subsidiary, Shell Gas B.V (SGBV), controlling 25.6 per cent equity of the shares; along with Total, 15 per cent, and Eni International (N.A.) NV, 10.4 per cent. Nigerian National Petroleum Corporation (NNPC) is the principal partner with 49 per cent equity shares.
A fortnight ago, normal gas export operations at the NLNG operations were disrupted for about 24 hours following a disagreement with the Nigerian Maritime Administration and Safety Agency (NIMASA) which accused the management of the company of refusing to pay the statutory 3 per cent levy on every freight entering or leaving the country through the nation’s territorial waters.
NIMASA had effectively blocked the Bonny Channel to deny all vessels operating in the area access or exit through the channel.
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