Nigeria LNG to get more gas by 2010

The Nigeria Liquefied Natural Gas (NLNG) plant expects supplies from Royal Dutch Shell’s Soku feed gas plant to rise from current levels by 2010, a senior NLNG executive revealed.

Shell’s Soku plant in Rivers State currently supplies the NLNG plant about 500 million cubic feet of gas per day (mcf/d) but this is expected to rise to a stable 650 mcf/day by the first quarter of next year.

The Nigeria LNG Limited, which supplies 10 per cent of the world liquefied natural gas, has been operating at only 50 per cent capacity since the feeder plant closed. At full production capacity, the Soku gas plant can supply about 1.1 billion cubic feet per day of gas to the NLNG. This is about 40 per cent of the export terminal’s total feed gas.

But the Soku plant is still only running at about half its capacity after reopening in October after lengthy repairs to pipelines damaged by saboteurs in November 2008.

“When Soku went off we went to below 50 per cent of our overall production capacity, but now with Soku 50-per cent back, that’s taken our overall production capacity up to about 60 per cent,” Patrick Olinma, commercial manager at the NLNG, said late Wednesday at the LNG conference in Barcelona, Spain.

“Of course, if Soku goes up our overall production capacity will also go up. What we think is that the plant (Soku) will stabilise at around 650 million cubic feet a day at the end of the year.”

Force majeure still in place

The plant was reopened in April 2009 but had to shut again just days later because of more pipeline leaks. However, the facility was restarted again in mid October. A Shell spokesman declined to give a production update for December. He added that the force majeure on supplies remains in place.

Since the shutdown of the plant in November 2008, Nigeria has lost the equivalent of 80 liquefied natural gas cargoes, each worth around $15 million.

Mr. Olinma said new gas production projects should boost supplies to the liquefaction facility next year.

“If everything goes as planned, some of them should be coming onstream towards the end of next year or the beginning of 2011, so it is looking up,” he said.

With Asian and European markets well stocked ahead of winter, any incremental supply coming could find its way to U.S. shores.

The gas company is jointly owned by the Nigerian National Petroleum Corporation (49 per cent), Shell (25.6 per cent), Total LNG Nigeria Ltd (15 per cent) and Eni (10.4 per cent).