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Nigeria LNG declares force majeure after Shell pipeline leak

21 May 2013

Nigeria LNG, Africa’s largest liquefied natural gas export terminal, said it had declared force majeure on exports following a leak in a supply pipeline owned by Shell Petroleum Development Company. Force majeure, a legal step that protects a company from liability when it cannot fulfill a contract for reasons beyond its control, was declared on May 15.

The Bonny Island LNG facility
The Bonny Island LNG facility

The declaration followed Shell’s shutdown of its Gbaran Ubie and Soku gas facilities after the pipeline leak.

Gas supply to Nigeria LNG has been cut by as much as 50 percent by the Shell shutdown, according to Bloomberg, and the company is seeking mitigation measures.

"The shutdown will be in place until the source of the leak is identified and necessary remedial actions are completed by SPDC, to ensure safe operation," NLNG said.

Nigeria LNG operates the Bonny Island plant, which has six production units able to produce 21.7 million metric tons of the chilled gas a year, or about 8% of the world’s total, according to data from the International Group of LNG Importers. 

A February force majeure on gas deliveries to Nigeria LNG after a similar pipeline leak cut shipments and helped boost spot LNG prices in northeast Asia to a record.

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