NLNG says force majeure to continue as it enters its tenth month – Report

The Nigeria Liquefied Natural Gas (NLNG) Limited has said that the force majeure it declared in October 2022 will continue.

This is according to the company’s External Relations General Manager, Andy Odeh, who confirmed this in an email to Reuters as reported on Wednesday evening.

According to Reuters, Odeh said: “The force majeure still subsists as the unavailability of upstream gas suppliers’ major liquids evacuation pipelines, occasioned by sabotage and vandalism, still impacts feed gas supplies. NLNG continues to collaborate with its customers to minimize the impact of the consequent gas supply shortage.”

Reuters also noted that NLNG has a production capacity of 22 million tons per annum and delivers most of its shipments to clients in Europe including Galp and Endesa with whom it has long-term contracts.

It also operates over 70 spot agreements across major LNG markets.

The Backstory

In October 2022, Nairametrics reported that NLNG had declared a force majeure on its 22.2 million ton per year Bonny LNG export facility due to widespread flooding that disrupted supply.

At the time, the country experienced one of its worst floods in a decade, resulting in the loss of hundreds of lives and destruction of properties across 28 states.

At the time of the declaration of a force majeure, Odeh had said: “The notice by the gas suppliers was a result of high floodwater levels in their operational areas, leading to a shut-in of gas production which has caused significant disruption of gas supply to NLNG.”

The impact of floods across states in the Niger Delta region, particularly, Rivers, Bayelsa, and Delta was catastrophic and severely affected oil and gas production at the time.

Nairametrics also reported that Nigeria’s oil and gas exports were at risk of declaring force majeure due to the high rate of flooding in Rivers, Delta, and Bayelsa states of the Niger Delta region.

This was because most communities in oil and gas-producing areas in the Niger Delta were flooded potentially placing oil and gas facilities at severe risk of shutting down production.

As of October 2022, the Ogba/Egbema/Ndoni communities in the Omoku local government area of Rivers State were flooded.

Also, the Ughelli-based $1 billion Utorogu Natural Gas Plant was flooded as well, increasing gas supply risks in the country at the time.

However, barely 48 hours after releasing the statement of a force majeure, NLNG said that the Bonny plant was still active and operational.

Odeh said: “None of NLNG’s assets on Bonny Island or in any of its host communities are impacted by the flood. The force majeure is a consequence of a similar notice by upstream gas suppliers due to the impact of flood in their production facilities.”

What you should know

In June 2023, the Statistical Review of World Energy report stated that Nigeria witnessed a decline in its natural gas production, reaching 40.4 billion cubic meters in 2022.

The country’s liquefied natural gas (LNG) exports also experienced a decrease, totalling 19.6 billion cubic meters in 2022.