Shell Declares FM on Nigeria LNG Feed Gas

Shell has declared force majeure on the gas pipeline system through which it supplies the bulk of its gas to Nigeria LNG. Its head office in London released the following statement shortly after 10am UK time on August 10.

“The Shell Petroleum Development Company of Nigeria Ltd (SPDC) declared force majeure on gas supply to NLNG on August 8 2016, following a leak on the Eastern Gas Gathering System (EGGS-1) pipeline through which it supplies the bulk of its gas to NLNG. The pipeline has been shut down for a joint investigation visit into the cause of the leak and repairs.

"SPDC continues to supply gas to NLNG through other pipelines." 

The statement did not indicate whether the leak was the result of any militant attack. However the Shell-operated Forcados crude export terminal, along with several others operated by international oil companies in the country, are subject to force majeure – meaning reduced or no exports are possible – although Shell lifted its two-month-long FM on its Bonny Light crude export terminal in early July.

NGW asked Shell by how much LNG cargo exports from Nigeria LNG were likely to be reduced. A spokeswoman replied: "I cannot comment on exports but note that we are using other pipelines to supply gas, as noted in our statement." Asked if militants might be involved, she declined to indicate any preliminary case for the leak, saying it was "under investigation."

Nigeria LNG is 49%-owned by state Nigerian National Petroleum Corporation (NNPC), 25.6% by Shell, 15% by Total and 10.4% by Eni. It has six LNG trains which have a combined production capacity of 22mn metric tons/yr, plus 5mn mt/yr capacity of LPG/condensate. NLNG appointed a new CEO, Tony Attah last month. Until earlier this year he had headed Shell's upstream operations in the country.

Mark Smedley