The Nigeria Liquefied Natural Gas Limited (NLNG) is planning a total shutdown of its six-train, 22 million tonnes per annum (MTPA)-capacity plant in Finima, Bonny Island, Rivers State over a proposed maintenance operation scheduled to commence by February or March 2024, investigation has revealed.
This routine exercise, it was learnt, may worsen the current shortages of Liquefied Petroleum Gas (LPG), better known as cooking gas, being suffered by Nigeria, as well the current inadequate supply of LNG to the European markets caused by the Russia-Ukraine War.
It will also potentially affect the federal government’s efforts to boost foreign currency liquidity in the economy and strengthen foreign exchange (FX) through the securitization of about $7 billion of Nigeria’s dividends from the NLNG.
THISDAY gathered from multiple sources that the gas liquefaction company is currently on mini shutdown as the engineering, procurement, and construction (EPC) contractor is carrying out mini maintenance on the plant.
The NLNG which is adjudged as the only successful Nigerian company with an element of government ownership, has been facing the challenge of under-capacity production due to feed gas supply shortages resulting from the rampant oil theft and pipeline vandalism in the Niger Delta.
This has not only impacted its gas delivery to the domestic and international markets but also its revenue generation, as the company had in July last year reported a Year-to-Date $7 billion loss due to under-capacity production.
In addition, the planned shutdown of operation for the maintenance may further delay the company’s plan to begin domestic LNG supply to the Nigerian market with an initial volume of 1.1 million tonnes per annum with effect from July 2022.
NLNG has been operating at roughly 50 per cent capacity for many months running and had lamented that the trend had dampened the hope of gas supply availability for its Train- 7 currently under construction, a project that has reached a 52 per cent completion level.
The liquefaction firm had also hinted that the gas supply shortages might hinder its planned expansion to Train-8 and beyond.
According to one of the sources, who spoke to THISDAY on condition of anonymity, NLNG’s plant is on “mini-shutdown” to enable us to carry out “Catalyst change-out”.
“But it’s not a major shutdown, it’s a mini shutdown because the major shutdown will be by either February or March next year. By then, they will stop operation totally until the maintenance is completed,” he added.
NLNG is a supplier of LPG to the Nigerian market and has committed 100 per cent of its LPG production, representing 40 per cent of the total cooking gas consumed by Nigerians annually, leaving the larger volume for import by the oil marketing companies.
The company disclosed recently that it had delivered about 380,000 metric tonnes of LPG so far this year, out of the 1.3 million tonnes per annum national consumption figure.
However, marketers, especially LPG plant owners have been complaining of supply deficit for the past several years, resulting in the hike in the retail prices.
Similarly, Nigeria, through the NLNG is one of Europe’s top LNG suppliers, and the country, as confirmed by the European Union (EU) exported 9.4 billion cubic meters (bcm) of LNG to Europe in 2022.
During a recent visit to the NLNG in Bonny, an EU delegation had indicated the imperative of reinforcing its diplomatic relationship with its reliable LNG partners like Nigeria in the short term to enable it to bridge the gas supply gap in the continent that resulted from the Russia-Ukraine War.
The EU’s Commissioner for Energy in Nigeria, Ms. Kadri Simson, who led the delegation, had revealed that Nigeria exported 9.4bcm of LNG to Europe in 2022.
Simpson, whose delegation took a tour of NLNG’s Central Control Room (CCR), the plant complex, and the Train-7 construction site, had also stated that there was potential to improve Nigeria’s gas supply to Europe between then and 2027
However, NLNG declined to comment on the said shutdown of operation next year as its Media and Communications department did not respond to phone calls as of the time of filing in this report.
Peter Uzoho
Follow us on:
