The Shell Petroleum Development Company of Nigeria Limited operated Joint Venture has declared force majeure on exports from the Forcados Terminal effective last week, following a leak on the Trans Forcados Pipeline.
The TFP is operated by the Nigerian Petroleum Development Company.
The declaration of the force majeure, according to a statement by the Corporate Media Relations Manager, SPDC, Precious Okolobo, has affected crude receipts into the Forcados Terminal.
The oil major had in late August declared force majeure on Bonny Light crude oil exports.
Bonny Light is one of Nigeria’s main export grades. The force majeure was lifted early September.
The force majeure clause is a standard clause in most contracts and it includes events such as natural disasters, wars and other occurrences not within the power or control of the executing party, which makes the implementation of the contract impossible.
The SPDC had on September 2 this year lifted the force majeure on Bonny Light exports following the repair and re-opening of the Trans Niger Pipeline and Nembe Creek Trunkline.
The TNP was repaired after a joint investigation visit found that a leak was caused by an illegal connection that failed.
A number of crude theft points were removed from the NCTL then.
The Trans Niger Pipeline transports about 180,000 barrels of crude oil per day to the Bonny Export Terminal and is part of the gas liquids evacuation infrastructure critical for domestic power generation at the Afam VI power plant and liquefied gas exports, according to a statement on Shell’s website.
Meanwhile, Shell Nigeria says it will focus its future investments in the country on natural gas for domestic consumption and export.
The Managing Director, Shell Petroleum Development Company, Mr. Osagie Okunbor, said last week while addressing journalists.
“Our strategy is to invest a lot more in gas for domestic consumption and export. We want to grow our deepwater and constrain our onshore oil production,” Okunbor told reporters in Port Harcourt.
Shell has been divesting onshore oil producing assets for the last few years and completed another set near the end of March.
The sales are part of an effort to move away from onshore oil projects in Nigeria, which are plagued by industrial scale theft, security problems and pipeline spills, which have become a growing legal liability.
Okunbor added that Shell’s flagship project would be the Gbaran-Ubie project, which will increase gas supplies for the Bonny liquefied natural gas export terminal. The first phase began production in 2010.
Bonny is Nigeria’s only LNG export terminal.
Currently, only two per cent of the country’s natural gas reserves are accommodated in marginal fields spread across the country, recent data from the Department of Petroleum Resources showed.
The highest of the gas reserves are controlled by various joint venture contracts between oil companies and the Federal Government, which account for 73 per cent of the country’s gas reserves.
Production sharing contracts account for 12 per cent, while indigenous firms control 13 per cent.
On the basis of terrain, deepwater projects account for 12 per cent of Nigeria’s gas reserves; land, 30 per cent; offshore, 30 per cent; and swamp, 28 per cent.
The Department of Petroleum Resources puts non-associated gas at 52 per cent of the gas reserves, while associated gas was pegged at 48 per cent.
The DPR also called for the harnessing and monetisation of stranded natural gas, saying there was a need for stakeholders in the gas business to facilitate competitive fiscal terms/pricing for the commodity; deepen market penetration and sustain demand growth; and vigorously pursue the completion of gas gathering/utilisation projects.
The department also urged players to pursue alternative funding models for gas infrastructure projects; address gaps in regulatory and commercial frameworks across the gas value chain; adopt new technologies geared towards harnessing stranded gas; and facilitate third-party access to stranded gas.