Force Majeure: NLNG to assess the extent of operational disruption.

Ibekimi Oriamaja Reports

Nigeria LNG Ltd. (NLNG) has stated that it is currently reviewing the situation with its gas suppliers in order to determine the extent of the disruption to its operations.

Andy Odeh, NLNG’s general manager of external relations and sustainable development, stated in a statement issued yesterday in Lagos.

Odeh stated that, as a reasonable and prudent operator, the company would try to mitigate the impact of the force majeure to the greatest extent possible.

He stated that NLNG had declared force majeure on product supplies from its Bonny Island, Nigeria, production facilities, in response to the declaration of force majeure by all of 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, resulting in significant disruption of gas supply to NLNG,” he said.

“As a result, NLNG invoked force majeure clauses in accordance with the provisions of the Sales and Purchase Agreements (SPA).

The company announced on Monday that severe flooding has disrupted supply, prompting it to declare force majeure, putting Nigerians at risk of a product shortage.

NLNG also claimed that all of its upstream gas suppliers had declared force majeure, forcing it to follow suit.

As a result of Russia’s invasion of Ukraine in February, Europe and other countries are attempting to replace Russian exports, potentially worsening Nigeria’s cash crisis.

Flooding has killed over 600 people, evacuated 1.4 million people, and destroyed roads and agriculture in Nigeria.

According to officials, the flooding, which was caused by unusually heavy rains and the discharge of water from a dam in Cameroon, could last until November.

Due to crude oil theft and pipeline vandalism, among other issues, Nigeria LNG Ltd’s plant was operating at up to 68% capacity in July 2022.

Theft and vandalism, according to CEO Philip Mshelbila, are slowly strangling Nigeria’s oil and gas sector.