The force majeure declared by the Nigeria LNG Limited (NLNG) in October 2022 at its plant on Bonny Island still subsists, sources in the company told Daily Telegraph on Wednesday.
One of the sources said the company was still encountering challenges that led to the declaration of force majeure.
Sources said the supply of gas to the Bonny plant still faces major constraints and is keeping production at the plant well below capacity.
The Chief Executive Officer of Nigeria LNG Limited (NLNG), Dr. Philip Mshelbila, during a recent visit of the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, to the NLNG plant on Bonny Island, Rivers State, decried some of the NLNG’s challenges.
He said: “Today, the biggest challenge we have, one that poses a threat not only to our existing operations but also to our expansion plans, is feed gas supply. Trains 1 to 6 currently operate at roughly half their potential capacity, a situation that has persisted for some time.
“The main issue behind the challenge is crude oil theft which affects the associated gas supply. The plant is half-full, not because we don’t have the capacity but because the feed gas is not there.
“We have aspirations for Train 8 but we cannot progress that work because we have no line of sight as to where that gas will come from. We believe that the gas can only come from deep water gas but the terms for that must be addressed. At present, the Production Sharing Contracts (PSCs) that govern deep-water exploration do not offer commercially viable terms for producers.”
General Manager, External Relations and Sustainable Development, NLNG, had on October 17, 2022, announced the declaration of the force majuere.
He said: “NLNG has declared force majeure on product supplies from its production facilities on Bonny Island, Nigeria 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. Consequently, NLNG activated force majeure clauses in accordance with the Sales and Purchase Agreements (SPA) provisions.”
