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ENI’s force majeure will only impact LNG production in short term – NLNG

By on December 30, 2015

The Nigeria Liquefied Natural Gas (NLNG) Limited has stated that the recent force majeure declared by the Nigeria Agip Oil Company (NAOC), the Nigerian subsidiary of ENI, on gas supply from its Obiafu-Obrikom (OB/OB) gas plant to NLNG would only impact the company’s production of LNG in the very short term.

Export of Nigeria’s LNG was said to have suffered setback as Italian energy giant, ENI declared force majeure on gas supply to the Bonny Island plant of NLNG due to pipeline sabotage.

NAOC had declared a Force Majeure  on gas supply from its Obiafu-Obrikom (OBOB) gas plant as a result of a fire incident that disrupted crude oil /condensate evacuation; thereby impacting its ability to meet its contractual gas supply commitment‎ to NLNG.

The declaration of the force majeure followed what was described as an act of sabotage on the Ogoda-Brass transport line operated by NAOC.

But the acting General Manager in charge of External Relations at NLNG, Mr. Charles Okon said in a statement that NLNG had not declared force majeure on LNG exports.

“Whilst ENI’s FM does impact NLNG’s production in the very short term, NLNG as a reliable supplier is working with NAOC and NLNG’s several other gas suppliers and customers to ensure that it meets its delivery obligations to its buyers,” he added.

Ogoda-Brass and Tebidaba-Brass are the two main onshore pipelines in  Bayelsa   State  operated by NAOC, which feed the offshore Brass oil export terminal

Previous sabotage of Ogoda-Brass and Tebidaba-Brass, had led to shut down of production at its Akri and Oshi fields as a precaution.

Also an attack on its Ogoda Manifold-Brass Terminal pipeline at the peak of militancy in the Niger Delta had halted production of around 33,000 barrels of oil and two million cubic metres of gas per day.

Nigeria LNG’s export plant at Bonny Island can produce 22 million metric tonnes of liquefied gas a year and accounts for about eight per cent of global LNG supplies.

Apart from selling on the spot market, the company has long-term supply contracts with buyers in Italy, Spain, Turkey Portugal and France.

There was a report of disruptions to LNG loadings at Nigeria LNG, though even under the force majeure the company could be exporting some volumes but it would likely reschedule some shipments with its customers.

Shell Petroleum Development Company (SPDC) had in August declared force majeure on gas supplies to the NLNG plant on Bonny Island in Rivers State.

However, the force majeure did not affect all the gas supplies to NLNG by Shell as only one line- Eastern Gas Gathering System (EGGS) was affected by the leak.

NNPC holds a 49 per cent stake in NLNG and the rest is owned by oil majors Shell, Total and Italy’s Eni. The company has shipped over 3,000 cargoes to customers since it was incorporated.

 

[ThisDay]