The Nigeria Liquefied Natural Gas Limited (NLNG) is reportedly considering a complete shutdown of its 22 million tonnes per annum (MTPA) plant in Finima, Bonny Island, Rivers State. This is based on an investigation carried out by THISDAY news. The proposed maintenance operation is scheduled to commence in February or March 2024, and sources suggest it might exacerbate the ongoing shortages of Liquefied Petroleum Gas (LPG or cooking gas) in Nigeria. Additionally, this could impact the inadequate supply of LNG to European markets due to the Russia-Ukraine War.
If implemented, the shutdown might also have repercussions for the federal government's plan to securitize approximately $7 billion of Nigeria's dividends from NLNG, affecting efforts to boost foreign currency liquidity and strengthen foreign exchange.
NLNG is currently undergoing a mini-shutdown for maintenance, with an engineering, procurement, and construction (EPC) contractor conducting minor repairs. The company has been grappling with under-capacity production challenges, attributed to feed gas supply shortages caused by oil theft and pipeline vandalism in the Niger Delta. This has not only affected gas delivery to domestic and international markets but also impacted revenue generation, resulting in a reported Year-to-Date $7 billion loss last year.
The planned shutdown may further delay NLNG's initiative to begin domestic LNG supply to the Nigerian market, initially set for July 2022. The company has been operating at around 50% capacity for several months, affecting gas supply availability for its Train-7 project, currently at 52% completion.
The company has committed 100% of its LPG production to the Nigerian market, representing 40% of the total annual consumption by Nigerians. However, complaints from marketers and LPG plant owners about supply deficits have led to retail price hikes.
Nigeria, through NLNG, is a significant LNG supplier to Europe, exporting 9.4 billion cubic meters of LNG to Europe in 2022. During a recent visit, the European Union (EU) indicated the need to strengthen diplomatic ties with reliable LNG partners like Nigeria to address the gas supply gap caused by the Russia-Ukraine War.
On November 15, 2023, NLNG, represented by Mr. Andy Odeh, General Manager of External Relations and Sustainable Development, clarified misinformation in a public statement shared on LinkedIn. NLNG emphasized its unwavering commitment to the safe and continuous operation of its plant, highlighting the necessity of routine maintenance, known as a 'shutdown' in technical terms.
NLNG corrected inaccuracies from THIS DAY News, clarifying that a routine turnaround maintenance does not entail a complete plant shutdown but involves specific train or unit maintenance. The company's meticulous planning ensures minimal disruption to overall production by transferring loads to unaffected areas during maintenance.
NLNG expressed disappointment in the lack of factual information and discretion in the report by THIS DAY News. Encouraging accuracy in reporting, NLNG urged for a more nuanced depiction of the energy industry's intricate details.