The force majeure declared at NLNG in October 2022 is still active. This is according to a recent report by S&P Global Commodity Insights.
S&P reports that on November 8, a spokesperson at the Nigeria Liquefied Natural Gas (NLNG) Limited confirmed that the force majeure is still in place.
This is because the Bonny plant is operating below 50%. The spokesperson said:
- “Supply of gas to the Bonny plant still faces major constraints and is keeping production at the plant well below capacity. The force majeure remains in place.”
Recurring attacks on pipelines and reduced output from aging wells have continued to disrupt gas supplies to the Bonny plant. Philip Mshelbila, the managing director of NLNG, highlighted these challenges, noting that such disruptions have led to production at under 50% of the plant’s total installed capacity.
NLNG is actively seeking alternative sources of gas beyond its regular suppliers to optimize the performance of the existing six trains at the facility.
Last year, these disruptions in gas supply had already reduced the plant’s production to 68% of its maximum operational capacity.
Backstory
In October 2022, NLNG announced a force majeure on product supplies from its production facilities on Bonny Island, following the declaration of force majeure by all its upstream gas suppliers.
The notice by the gas suppliers was a result of high flood water levels in their operational areas, leading to a shut-in of gas production which has caused significant disruption of gas supply to NLNG.
More Insights
The company’s six trains hold a capacity of 22.5 million metric tons per year (equivalent to 31 billion cubic meters per year).
However, presently, it’s undergoing an expansion to boost its capacity to 30 million metric tons per year with the addition of a seventh train, which is at a 52% completion rate.
Note that in 2022, Nigeria’s total LNG exports reached around 14.7 million metric tons. However, in 2023, the figures stand at 12.5 million metric tons so far, based on data from S&P Global Commodity Insights.
In 2023, Spain was the top importer of Nigerian LNG, taking in 3.3 million metric tons, followed by Portugal at 1.4 million metric tons, and China at 0.9 million metric tons.
Recall that Nairametrics recently reported that NLNG Managing Director, Dr. Philip Mshelbila, announced that the company’s plans to enhance its gas processing capacity through the construction of an additional Train 8 are no longer viable.
The Minister for Gas, Ekperikpe Ekpo, was present during Dr. Mshelbila’s admission in Bonny.
He highlighted that the company is facing an inadequate supply of feed gas.
This scarcity is attributed to widespread crude oil theft, which has significantly impeded oil and gas operations over several years.
The situation has intensified due to the declining production of the country’s crude oil and its associated gas.
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