NLNG to rely on alternative supply sources

The Nigerian Liquefied Natural Gas Limited has said it is relying on alternative sources of gas supply to enable it continue production and loadings at Bonny following  the declaration of force majeure on its gas supplies  from Shell.

Tony Okonedo, manager, corporate communication and public affairs of NLNG stated this yesterday while confirming that SPDC has declared force majeure on gas supply to NLNG following a leak on the Eastern Gas Gathering System (EGG-1) pipeline through which it supplies the bulk of its gas to NLNG.

“NLNG can confirm that FM has been declared on gas supplies from SPDC via the Eastern Gas Gathering System (EGGS1). Alternative sources of gas supply have enabled NLNG to continue production and loadings at Bonny,” said Okonedo.

A statement from SPDC stated that this latest 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 a Shell spokesman, adding that SPDC continues to supply gas to the facility through other pipelines.

NLNG has the capacity to produce 22 million tonnes of LNG a year and has long-term supply contracts with Italy’s Enel , Shell, France’s Engie SA and Portugal’s Galp, among others. It also sells on the spot market.

Down more than two-thirds from 2014 levels, spot LNG prices have been rising in recent months due to production outages in Angola and Australia.

The rally ran out of steam last week and prices declined sharply as Chevron’s Gorgon LNG project resumed production, but potentially lower output from Nigeria LNG may again tighten supply.

ISAAC ANYAOGU