Force Majeure: NLNG To Review Extent Of Disruption To Operations

The Nigeria LNG Ltd. (NLNG), has said it is  currently reviewing the situation with gas suppliers to ascertain the extent of the disruption to its operations.

General manager, External Relations and Sustainable Development of NLNG, Andy Odeh, said in a statement, yesterday in Lagos.

Odeh said the company would, as a reasonable and prudent operator, endeavour to mitigate the impact of the force majeure to the extent reasonably possible.

He said NLNG had 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.

According to him, “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.

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“Consequently, NLNG activated force majeure clauses in accordance with the Sales and Purchase Agreements (SPA) provisions.

The company said on Monday that severe flooding has disrupted supply prompting it to declare force majeure, as Nigerians face a possible scarcity of the product.

NLNG further claimed that all of its upstream gas suppliers had announced force majeure, compelling it to do the same.

The situation will reduce global gas supplies and possibly deepen Nigeria’s cash crisis as Europe and other countries try to replace Russian exports as a result of the invasion of Ukraine in February.

Over 600 people have died, 1.4 million have been evacuated, and roads and agriculture have been devastated in Nigeria due to flooding.

The flooding, which was brought on by unusually high rains and the discharge of water from a dam in Cameroon, may go into November, according to officials.

In July 2022, Nigeria LNG Ltd’s plant was producing at up to 68 per cent of its capacity due to theft of crude oil and vandalism of pipelines, among other problems.

Chief executive Philip Mshelbila had said theft and vandalism were gradually strangulating Nigeria’s oil and gas sector.