The Nigeria Liquefied Natural Gas (NLNG) Limited has confirmed that the federal government’s fight against crude oil theft is yielding a massive result and has led to improved gas supply in the country.
NLNG spokesperson, Andy Odeh, also confirmed that its key crude oil transportation pipelines, and production have not been affected by the massive flooding in the Niger Delta.
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Odeh said the success recorded by the Nigerian National Petroleum Company (NNPC) Limited increased as a result of surveillance and the fight against oil thieves and pipeline vandals.
The NLNG spokesperson said there had been an improvement in the availability of some oil pipelines since the government and state oil firm, NNPC Ltd., stepped up efforts in August to combat theft.
Rampant pipeline theft had dragged oil production below one million barrels per day (bpd) that month for the first time since the 1980s and had a knock-on effect on gas availability, as the bulk of Nigeria’s gas comes as a by-product of oil output, Reuters reported.
“We have begun to see improvement in the availability of key crude oil transportation trunk lines,” NLNG Odeh said via email, adding, “If this trend is sustained, we expect it will support improved gas supply to NLNG once currently flooded oil and gas infrastructures becomes accessible”.
In August, the government and NNPC launched coordinated efforts to combat theft, including hiring ex-agitators to protect pipelines.
NLNG declared force majeure last month due to the effect heavy flooding had on its gas suppliers, but it has continued to export cargoes.
Odeh said the force majeure remained in place, but declined to share the operational levels due to a “rapidly evolving situation”. He said its Train 7 project, which would increase output at its Bonny Island LNG plant to 30 million tonnes per annum (mtpa), from 22 mtpa, was 32 percent complete.
“Construction has commenced in earnest and going according to plan,” Odeh said, without commenting on the expected completion date.
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In May, NNPC Chief Executive, Mallam Mele Kyari, said he expected the project to be completed in four years.
Kyari added, “If this trend is sustained, we expect it will support improved gas supply to NLNG once currently flooded oil and gas infrastructure becomes accessible.”
Nigeria loses 700 barrels per day to crude oil thieves, amounting to $70 million daily at $100/barrel.
Separately, Odeh stressed that although there had been reduced gas supply, NLNG’s plants had not been seriously impacted.
He stated, “Feed gas supply and gas gathering systems face major challenges in recent times. Presently, due to floods in the operational sites of NLNG’s feed gas suppliers, there has been reduced gas supply with upstream suppliers’ declarations of force majeure.
“While NLNG has in turn declared force majeure based on provisions in relevant LNG agreements, our own facilities remain unaffected and our capacity to produce LPG is intact. We continue to load and ship LPG to the domestic market.
“Therefore, we reassure Nigerians of our on-going operations in the immediate and look forward to an urgent return to normalcy.”
Chief Upstream Investment Officer, NNPC Upstream Investment Management Services (NUIMS), Bala Wunti, had said during the interception of a ship that with the detection, the country would begin to witness improved oil supply.
Wunti said, “I think there is no doubt that we have made significant success in terms of detection, deterrence, and in term of response.
“What is now left is for Nigerians to start witnessing the recovery journey, and I think before the end of the month, you will see the benefits of all the architecture that has been put in place.
“We have anticipated that this architecture will start yielding results in 90 days, but with what we are seeing, we will start seeing results in about 60 days. We are in our 40 days and we believe in another 10 days we will start seeing results.”
