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NLNG declares force majeure on feedgas outage

07 Feb 2013 18:19:45 | glm lmd

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Nigeria LNG (NLNG) has declared force majeure on LNG deliveries from its 22m tonnes per annum (mtpa) plant because of an unexpected shutdown of a major feedgas pipeline, the consortium confirmed on Thursday.

"This shutdown, which reduced gas supply to NLNG by about 45%, has resulted in NLNG temporarily not being able to supply and serve its customers in the usual manner," NLNG said in a statement late on Thursday.

The NLNG force majeure (FM) was declared on 6 February, a day after feedgas supplier Shell Petroleum Development Co (SPDC) itself declared FM on gas supply to the plant after it detected a gas leak in the GTS-2 pipeline, otherwise known as the Eastern Gas Gathering System (EGGS-1), according to SPDC.

While supplies from EGGS-1 are required for the effective take-off of the NLNG trains 4 and 5, SPDC has also had to shut down gas production at its 1 billion cubic feet (bcf)/day Gbaran/Ubie plant as well as its Soku gas plant, NLNG said.

The pipeline needs to be depressurised while investigations take place to identify the necessary remedial actions, Shell and NLNG spokesmen confirmed.

While NLNG said it was working with SPDC and its other gas suppliers to manage the gas shortage situation, trading sources told ICIS that a single cargo free-on board tender for a 1-3 March loading window has been cancelled. The tender, which had been issued earlier in the week and had been due to close next Monday, had attracted significant interest due to the current tightness in global LNG supply.

One trading source has said that as many as eight cargoes among three portfolio companies for delivery dates in April and May would be sought elsewhere as a result of the NLNG production outage.

There are seven offtakers from trains 4 and 5, according to NLNG; UK's BG Group, Italy's Eni, Portugal's GALP, France's Total, Anglo-Dutch major Shell, and Spain's Endesa and Iberdrola,

Across all trains, NLNG has supply contracts totalling 19mtpa with the BG Group, Italy's Enel, France's GDF SUEZ, Spain's Endesa, Iberdrola, and Gas Natural, Portugal's Transgas and Turkey's BOTAŞ.

The NLNG outage adds to a production issues at Australia's North West Shelf, which itself is off line due to cyclone activity in the area.

Further out, market sources also confirmed planned maintenance at the 14.8mtpa Atlantic LNG facility in Trinidad & Tabago in April.

Routine maintenance lasting seven days is scheduled for Trains 2 and 3, which are 3.3mtpa capacity each.

The turnaround is expected to last seven days, both scheduled at the same time.

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