Shell lifts force majeure on gas for Nigeria LNG

Shell has lifted a force majeure on gas supplies to the Nigeria Liquefied Natural Gas (LNG) plant. The company declared force majeure on May 16 after a leak along the Eastern Gas Gathering System near Awoba in Rivers State. It affected 1.5 billion standard cubic feet of gas per day. That declaration came just less than a month after it had lifted a force majeure on supplies to the plant, during a time in which Shell was reporting growing attacks on pipelines by oil thieves.

Total confirms sale of some Nigerian Assets

Total has confirmed that the firm was in talks to sell its assets in Nigeria, worth about $2.4 billion. However, Total CEO, Christophe de Margerie, declined to name the potential buyer or value of the deal but saying he would not deny the earlier report about the sale. According to him, “it doesn't mean we are scared and intend to start some kind of walk out of Nigeria...Total is happy to develop its projects in Nigeria”.

Nigeria is Africa's largest crude oil exporter and oil companies operating there have long had to deal with attacks on their pipelines and staff, with the country's worst floods in 50 years seriously affecting their output in recent weeks.

Total declared force majeure in mid-October on gas supplies to the Nigerian Liquefied Natural Gas’ (NLNG) liquefaction plant, saying it had stopped oil and gas production from Oil Mining Lease (OML) 58, which was losing 90,000 barrels per day (bpd) of oil equivalent, in which it has a 40-per-cent stake.

NNPC eyes Asian LNG Market

The Nigerian National Petroleum Corporation (NNPC) has said it is commencing a new trading strategy for forthcoming Liquefied Natural Gas (LNG) projects in Nigeria. The new marketing strategy for LNG, according to the Group Managing Director (GMD), Mr. Andy Yakubu, included capturing and retaining global high value LNG markets like the Asia-Pacific market as well as improved participation in the downstream segment of the LNG value chain.

 In his presentation at the maiden edition of LNG Producers-Consumers Conference, which was organised by the Government of Japan, the GMD said the corporation was compelled to expand its LNG trading strategy to include the competitive Asia market following changing market conditions in the Atlantic Basin which it services.

He stated the country’s LNG production capacity had grown from a modest two train base LNG project of 8 million tonnes per annum (mtpa) in 1999 to the current six operating train capacity of 22 mtpa, adding that the six trains exported about 22 mtpa of LNG, which represents 10 per cent of world LNG production in 2011.

Disclosing that the country’s overall target  was to immediately take a Final investment Decision (FID) on the Brass LNG’s 10mtpa project as well as a FID on the 7.8mtpa seventh train of Nigeria Liquefied Natural Gas (NLNG) and thereafter OKLNG, Yakubu said that with all these in place, Nigeria would comfortably service LNG needs of Atlantic and Pacific Basins respectively.

FG, Shareholders rake $51bn from NLNG investment

The Federal Government and other shareholders of the Nigeria Liquefied Natural Gas (NLNG) project have earned $51 billion in revenues from the sale of liquefied natural gas in the past 13 years. Speaking when he visited the NLNG plant in Bonny Island, Rivers State, former head of state, General Yakubu Gowon (rtd.), stated that the plant also delivered $9 billion in dividends to the Federal Government and paid $10 billion to the joint venture companies during the period under review.

Gowon, who stated that the country only produced its first liquefied natural gas in 1999, after 42 years of crude oil exports, noted that the Nigeria LNG project would have earned $130 billion over the 35 years of inactivity when it was first conceptualized in the 1970s. He further disclosed that the proposed Train Seven of the NLNG would provide 10,000 construction jobs and also attract over $8 billion in Foreign Direct Investment (FDI). He urged the Federal Government and other stakeholders to commence the construction of the seventh train, adding that the NLNG, which used to be the fastest growing LNG plant in the world, should not be allowed to fail. Gowon said that with Nigeria’s 187 trillion cubic metres of proven gas reserves estimated to last for 109 years and about 600 trillion cubic metres of unproven reserves expected to last for about 300 years, the country has more than enough gas to meet its domestic and export market commitments.

 Also speaking, the Managing Director of Nigeria LNG Limited, Mr. Babs Omotowa, disclosed that the plant’s six-train facility has a capacity for 22 million metric tonnes per annum (Mtpa) of LNG and up to 5 Mtpa of natural gas liquids. He noted that the company had grown from its well-earned reputation as the world’s fastest growing LNG plant to a facility with stable production. According to him, the company sends one cargo of LNG everyday down the Bonny River to buyers all over the world, adding that the company currently accounts for eight per cent of global LNG supplies. Omotowa stated that as the single biggest contributor to government’s efforts to diversify the Nigerian economy, the company currently accounts for five per cent of the country’s Gross Domestic Product (GDP).

Oil Payments: NEITI Summons NNPC, Shell Others

Nigeria Extractive Industries Transparency Initiative (NEITI) has invited the Nigerian National Petroleum Corporation (NNPC) and some oil companies to streamline its audit report of petroleum proceeds accruing to the Federal Government between 2009 and 2011. Also invited are Shell Petroleum Development Company (SPDC), Chevron Nigeria Limited, and Nigeria Agip Oil Company (NAOC) Ltd among others to validate and reconcile payments they made to the government.

The invitation is also extended to all companies and government agencies involved in payment and receipt of revenue from Nigeria’s petroleum sector is expected to validate all payments within the period under review to avoid condemnation of its audit report when published.

It is also expected that the exercise will afford all parties involved an opportunity to reconcile such payments with data collected by NEITI’s independent auditors, as well as review presentations on system documentation by companies and relevant government agencies in line with the audit requirement.

Others companies to appear before it in Lagos are NNPC, SPDC, NAOC, Chevron, Shell Nigeria Exploration and Production Company (SNEPCO), Nigeria Agip Exploration (NAE), Agip Energy Natural Resources (AENR), Mobil Producing Nigeria Unlimited, Esso Exploration and Production Nigeria Limited, Nigerian Petroleum Development Company (NPDC) and CONOCO Phillips.

Also among the list are the Office of the Accountant General of the Federation, Power Holding Company of Nigeria (PHCN), Nigeria Gas Company (NGC), Nigeria Liquefied Natural Gas (NLNG), Federal Inland Revenue Services (FIRS), Department of Petroleum Resources (DPR), Central Bank of Nigeria (CBN), Nigeria Maritime Administration and Safety Agency (NIMASA) and the Nigeria Petroleum Investment Management Services (NAPIMS).

The invited companies are expected to tender documents such as system documentation on production and financial flows including payments and receipts of such flows by relevant government agencies on behalf of the federation as well as evidence of streams of payments made by companies.

NEITI’s audit of Nigeria’s oil and gas sector has come with disclosure of anomalies in revenue remittance by oil and gas companies to the federation account, with NNPC majorly accused in the audit reports of falling short in its remittance of oil proceeds to the government.