The operational crisis at the Nigeria Liquefied Natural Gas Limited (NLNG LTD) continues to deepen as the outage at its Bonny Island facility drags on, with natural gas supplies plummeting by a staggering 80 per cent, a new report by Bloomberg has said.
The report noted that the required gas supply has dropped by 80 per cent and only 20 per cent of the company’s needs are being met by available facilities.
The report by Punch newspaper on Wednesday noted that this development, which has worsened in recent weeks, is a threat to Nigeria’s revenue streams and its projected 2025 dividends of N727bn, a 113 per cent growth from N346bn last year.
Vandalism and sabotage have curtailed operations at the plant and curbed exports of liquefied natural gas, or LNG.
The report recalled that only two of the facility’s six processing units are currently functional, and three gas pipelines are down, according to the Chief Executive Officer of the NLNG, Mr. Philip Mshelbila, last week at the Nigeria International Energy Summit in Abuja.
Mr. Mshelbila attributed the operational challenges to persistent attacks on its gas pipelines by vandals.
The report noted that the declining output from Nigeria’s only LNG facility could trigger higher spot prices as global supply to Asia and Europe tightens.
In 2024, almost half of Nigeria’s LNG exports went to Asia, with another third going to Europe and the remaining to the Americas and Middle East, according to data compiled by Bloomberg.
The NLNG exports declined by 40 per cent in February from the previous month, following the destruction of vital pipelines by suspected vandals, data compiled by Bloomberg show.
Consequently, planned shipments for next month were delayed for at least 10 days. Shell Plc. is one of the stakeholders in Nigeria LNG, along with Nigerian National Petroleum Corp., TotalEnergies and Eni. A spokesperson for Shell did not immediately respond for comment.
The NLNG was incorporated as a limited liability company to harness Nigeria’s vast natural gas resources and produce Liquefied Natural Gas and Natural Gas Liquids for the domestic market and export.
The data sourced by Punch newspaper showed the federal government has received about $21.56bn of the $44bn dividends disbursed by Nigeria LNG in the last 25 years.
The reduction in production capacity is expected to have far-reaching consequences, including a decline in export earnings and potential job losses in the sector. Security challenges in the Niger Delta region, where most of Nigeria’s oil and gas infrastructure is located, have persisted for years.
GIK/APA