Nigeria LNG (NLNG) Limited yesterday declared force majeure as flood disrupts supply, according to its spokesperson, Andy Odeh.
The shut-in will worsen Nigeria’s cash crunch and shrink global gas supply as Europe and others struggle to replace Russian exports due to the invasion of Ukraine in February, Reuters reported.
NLNG said all of its upstream gas suppliers had declared force majeure, forcing it to make the declaration as well.
“The notice by the gas suppliers was a result of high flood water levels in their operational areas, leading to a shut-in of gas production which has caused significant disruption of gas supply to NLNG,” spokesperson Andy Odeh said.
Odeh said NLNG is still determining the extent of the disruption and would try to mitigate the impact of the force majeure.
Flooding in Nigeria has killed more than 600 people, displaced 1.4 million and destroyed roads and farmland. Officials have warned that the flooding, caused by unusually heavy rains and the release of water from a dam in Cameroon, could continue into November.
NLNG’s supply had already been limited due to prolific oil theft that has slashed output from what is typically Africa’s largest exporter. NLNG had exported roughly 18 cargoes in September, according to Refinitiv data.
Nigeria relies on fossil fuel exports for 90% of its foreign exchange and roughly half its budget. Crude oil exports fell below 1 million barrels per day (bpd) on average in August, the lowest level since the 1980s, due to theft that has exceeded 80% on certain pipelines.
The notice by the gas suppliers was a result of high flood water levels in their operational areas, leading to a shut-in of gas production which has caused significant disruption of gas supply to NLNG.
