Natural Gas Supply To NLNG Drops By 80% – Report

A recent report has disclosed the detrimental effects of vandalism on Nigeria Liquefied Natural Gas Limited (NLNG) operations at its Bonny Island facility, resulting in an 80 percent reduction in natural gas supplies.

According to the Bloomberg report, the required gas supply has diminished by 80 percent, leaving only 20 percent of the company’s needs fulfilled by the limited operational facilities.

Acts of vandalism and sabotage have significantly hindered the plant’s operations and restricted the export of liquefied natural gas (LNG).

Naija News reports that this information follows a statement made by the company’s Chief Executive Officer, Philip Mshelbila, during the Nigeria International Energy Summit in Abuja last week, where he indicated that only two out of the six processing units at the facility are currently operational, with three gas pipelines non-functional.

He attributed the operational challenges to ongoing attacks on the pipelines by vandals.

The report further highlighted that the declining output from Nigeria’s sole LNG facility could lead to increased spot prices as global supply to Asia and Europe becomes more constrained.

In 2024, nearly half of Nigeria’s LNG exports were directed towards Asia, with an additional third sent to Europe, while the remainder was distributed to the Americas and the Middle East, as per data from Bloomberg.

In February, according to Bloomberg’s compiled data, Nigeria’s LNG exports fell by 40 percent compared to the previous month, following the destruction of critical pipelines by suspected vandals.

As a result, planned shipments for the upcoming month have been postponed by at least 10 days. Shell Plc. is among the stakeholders in Nigeria LNG, alongside the Nigerian National Petroleum Corporation, TotalEnergies, and Eni.

Naija News understands that a court in London last Wednesday mandated Nigeria LNG to compensate two commodity traders, Vitol and Glencore, with $380 million due to the company’s failure to fulfill contracted deliveries.

A representative from Shell has not yet provided a comment on the matter.

Similarly, a spokesperson for Nigeria LNG has not yet responded regarding the decrease in gas supply.

Nigeria LNG was established as a limited liability entity to capitalize on Nigeria’s extensive natural gas reserves, focusing on producing Liquefied Natural Gas and Natural Gas Liquids for domestic consumption and export.