Nigeria’s earnings hit again as Shell shuts down NLNG pipeline

– Shell has shut down a gas pipeline which carries product to NLNG facility in Bonny Island because of leakage which it just discovered

– Spokesman of the company says an investigation team will visit the area to find out what caused the leakage

– NLNG will continue to receive product from other pipelines while the leaking one is taken care of, the company says.

Shell pipeline

Nigeria’s oil and gas earnings took a massive hit on Wednesday as Shell Petroleum Development Co (SPDC) announced the shutting down of its pipeline which supplies gas to the Nigeria Liquefied Natural Gas (NLNG) export facility on Bonny Island. Reuters quoted a spokesman of the company as saying the SPDC has declared force majeure on gas supplies to the NLNG export facility because of leakage discovered same day.

“The Shell Petroleum Development Company of Nigeria Ltd (SPDC) declared force majeure on gas supply to NLNG on 8 August 2016, following a leak on the Eastern Gas Gathering System (EGGS-1) pipeline through which it supplies the bulk of its gas to NLNG,” a spokesman said in an emailed statement. SPDC, Royal Dutch Shell’s Nigerian unit, is a joint venture with state oil company Nigerian National Petroleum Corp (NNPC) and they supply gas to the LNG plant. Reuters hinted that the declaration may impact exports from the facility.

“The pipeline has been shut down for a joint investigation visit into the cause of the leak and repairs,” said the spokesman, who added that SPDC will continue to supply gas to the NLNG facility through other pipelines. The NLNG, which was set up 16 years ago to export gas, is jointly owned by NNPC, Shell, Total and Eni and has the capacity to produce 22 million tonnes of LNG a year. recalls that militant group called Niger Delta Greenland Justice Mandate issued a warning to the president Muhammadu Buhari-led federal government on Tuesday, August 9 that in a few days, refineries in the region will be destroyed. The region has been a hub of activities by militants who have vandalised oil and gas pipelines.