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Nigeria
Cuts LNG Exports After Theft
Nigeria has been forced to cut exports of liquefied
natural gas, a key source of energy for Europe, after
Royal Dutch Shell closed a facility in the Niger Delta
to repair damage caused by thieves.
Nigeria Liquefied Natural Gas (NLNG), which says it
delivers about 10 per cent of all world LNG supply,
issued a statement on Thursday saying it would not be
able to meet all its export commitments following the
temporary closure of the plant.
Attacks by gunmen on oil installations in the Niger
Delta have regularly disrupted oil exports from Africa's
biggest crude producer over the past few years.
But the fact that thieves have affected Nigeria's LNG
exports has added a new dimension to the threat the
illicit trade poses to energy security in the west.
Industrialised countries had hoped Nigeria's exports of
LNG gas super-cooled for easier shipping would prove
less vulnerable to disruption than the vast network of
oil pipelines snaking through the swamps of the delta.
Shell's main unit in Nigeria, the Shell Petroleum
Development Company, said on Thursday it had been forced
to temporarily shut down the Soku gas plant to repair
damage caused by vessels illegally siphoning fuel from
connecting pipelines. Gas, crude oil and other products
are all produced in the adjacent area.
"Over the last few weeks the situation has deteriorated
rapidly and resulted in a situation where safety
concerns dictated we had to shut it down," Mutiu Sunmonu,
SPDC managing director, said in a statement.
Soku supplies some 40 per cent of the gas used by NLNG,
Nigeria's sole LNG export facility. Much of the gas is
shipped to terminals in the US, Spain, France and Turkey
but some also ends up in Asian countries including India
and Japan. An NLNG official said exports would be
affected by the closure of Soku, but it was unclear by
how much and to which clients. Shell declined to say how
long the repairs at Soku might take.
Vessels crewed by oil thieves have been able to approach
right to the edge of the Soku facility in spite of the
presence of Nigerian soldiers, stationed to guard the
plant's housing area and pipeline complex.
Frank Harris of Wood Mackenzie, the consultancy, said
the impact of the shutdown would depend on how long it
lasted.
"There are rumours of LNG cargoes waiting, sitting
somewhere, hoping that there will be a spike in Asian
demand and a rise in prices," said Mr Harris.
"So the market is better positioned to absorb some
disruption to Nigerian deliveries than it was a year
ago."
--
West Africa Correspondent
Financial Times
Nigeria fixed line: +234 1 791 7611
Nigeria mobile: +234 8085 056 329 or +234 7037 949 404
UK mobile: +44 7894 005 131
Matthew Green
Lagos
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