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Negative signs for demand have…

Shell Declares Force Majeure For Gas Supplies to Massive Bonny Island Facility

Bonny Island

Shell has declared a force majeure on gas supplies destined for the massive gas facility on Bonny Island – a site co-owned by the Anglo-Dutch firm and the Nigerian National Petroleum Corp.

“The [Shell Petroleum Development Company] declared force majeure on gas supply to [the Nigeria Liquefied Natural Gas facility] on August 8th, 2016, following a leak on the Eastern Gas Gathering System (EGGS-1) pipeline through which it supplies the bulk of its gas to NLNG,” a statement by Shell said.

The 16-year-old Bonny Island facility has been jointly owned and operated by the NNPC, Shell, Total and Eni since it came online.

The site has the capacity to export a total of 22 million tons of liquefied natural gas in a year, allowing it to secure long-term export contracts with oil majors in Italy, France and Portugal.

Bonny Island is located in the Niger River Delta – an area where separatists have taken to attacking oil operations in order to hurt Lagos’ revenues and force the national government to address development disparities between regions.

Recent estimates suggest that groups like the Niger Delta Avengers have cut Nigeria’s oil production rate by 700,000 barrels per day, playing its part to cause the country to lose its position as the top crude producer in Africa to Angola.

On Tuesday, local media reports surfaced, detailing an attack on a Nigerian military checkpoint in the state of Bayelsa, killing three soldiers. The NDA – the largest separatist group active in the region - has not yet claimed responsibility for the attack.

Cracks in NDA’s leadership are beginning to show. The Reformed Niger Delta Avengers, a group that claims to have splintered off of the original NDA, said this week that Former President Goodluck Jonathan and 19 other politicians have vocally supported separatist attacks in the oil-rich nation.

By Zainab Calcuttawala for Oilprice.com

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