NLNG May Raise Gas Supply by 12% after Deal with Seplat

•Renaissance halts oil output through pipeline after oil spill

Emmanuel Addeh in Abuja

The Nigeria Liquefied Natural Gas (NLNG), Africa’s biggest liquefied natural gas plant may be able to raise supply by as much as 12 per cent after striking a deal with Seplat Energy, which recently acquired Mobil Producing Nigeria Unlimited (MPNU).

The gas plant’s operations have been hobbled by fuel theft, but is set to see gas supplies jump once the agreement with Seplat Energy goes into effect, an executive of the indigenous oil company told Bloomberg News.

Under the terms of a preliminary agreement, Seplat will send more than 150,000 tons of gas a month to the NLNG plant, the Managing Director, ANOH Gas Processing Company (AGPC), Effiong Okon, said. That is  more than 12 per cent higher than last year’s monthly average.

Such an increase, the report said, would be a major boost to the plant, which has seen its gas supplies plummet as gangs of thieves tap the pipelines that feed the site. It’ll be just the second time that NLNG — a joint venture between Nigeria, Shell Plc, TotalEnergies SE and Eni SpA — has received gas from a third party.

Both sides are now working out the technical and commercial details of the deal, according to Okon, who expects gas to start flowing to the plant in the third quarter.

Seplat has seen gas production rise by 50 per cent after acquiring assets from the Nigerian unit of Exxon Mobil Corporation. The NLNG accord would bring much-needed revenue to its $700 million ANOH gas plant, which has been idle since completion following delays to a key east-west pipeline due to take its output, Bloomberg added.

The deal “represents a strategic convergence of need and opportunity,” an analyst at the African Energy Council (AEC), Katlong Alex, remarked. It “enables Seplat to overcome infrastructure limitations, while helping NLNG tackle its persistent gas supply issues,” he added.

The agreement will be “short term,” pending completion of the pipeline, Okon said. NLNG didn’t respond to a request for comment by Bloomberg.

Meanwhile, Renaissance Africa Energy Company Limited has halted oil shipments via its Okordia-Rumuekpe pipeline in the coastal Rivers state following a spill, the independent oil firm said yesterday.

The pipeline, which transports crude oil south to the Rumuekpe manifold for export via the Bonny terminal, experienced the spill in the early hours of Monday in Ikata community in the Ahoada East district of the state, according to the Youths and Environmental Advocacy Centre (YEAC-Nigeria). The environmental group’s volunteer network initially detected the spill.

Renaissance, owner of a former Shell onshore subsidiary which operates the pipeline, has halted production into the pipeline and taken measures to minimize potential environmental damage, a spokesperson said in a statement, reported by Reuters.

While Renaissance did not disclose the cause or scale of the spill, YEAC-Nigeria said it was likely due to third-party interference, with crude oil spreading into the surrounding environment, the report added.

Renaissance has notified government regulators and is coordinating a joint investigation with regulatory bodies and the local community.

Persistent oil spills and pipeline vandalism plague Nigeria’s oil-rich Niger River delta, causing pollution that harms local communities and ecosystems, and frequently disrupting oil production.