Nigerian Liquefied Natural Gas Limited (NLNG) says it is relying on alternative sources of gas supply to enable it continue production and loading at Bonny, following the declaration of force majeure on its gas supplies from Shell Petroleum Development Company (SPDC).

Tony Okonedo, manager, corporate communication and public affairs of NLNG, said this yesterday while confirming that SPDC had declared force majeure on gas supply to the company following a leak on the Eastern Gas Gathering System (EGG-1) pipeline through which it supplied the bulk of its gas to NLNG.

“NLNG can confirm that FM has been declared on gas supplies from SPDC via the Eastern Gas Gathering System (EGGS1). Alternative sources of gas supply have enabled NLNG to continue production and loadings at Bonny,” Okonedo said.

Companies declare force majeure when it is obvious they may be defaulting on their contractual obligations as a result of circumstances beyond their control.

 A statement from SPDC stated that this latest declaration might impact exports from the facility, which conveys some 1.5 billion standard cubic feet per day of gas.

“The pipeline has been shut down for a joint investigation visit into the cause of the leak and repairs,” said a Shell spokesman, adding that SPDC continues to supply gas to the facility through other pipelines.

Nigeria LNG also has long-term gas supply agreements with two other joint ventures for supply of feed gas – Total Exploration & Production Nigeria and Nigerian Agip. It also relies on indigenous marginal field operators for feed gas.

Set up 16 years ago, Nigeria LNG has the capacity to produce 22 million tonnes of LNG a year and has long-term supply contracts with Italy’s Enel , Shell, France’s Engie SA and Portugal’s Galp, among others. It also sells on the spot market.

With a six-train complex of 22mtpa LNG nameplate production capacity and 5 mtpa NGLs production capacity, NLNG now has the capacity to load and safely deliver over 300 cargoes of its products annually

 “Since inception till date, its payment to joint venture feed gas suppliers is about $23 billion; 55-60 percent of this amount goes to the Federal Government of Nigeria via its shareholding in Nigerian National Petroleum Corporation (NNPC),” states the company’s facts and figures publication for 2016

It further stated, “NLNG has also over the years paid dividends of almost $32 billion, out of which 49 per cent went to the Federal Government of Nigeria courtesy of its shareholding in the company, again via NNPC.”
Source:BusinessDay