NLNG loses $7b to insecurity, pipeline vandalism in one year
By Jeph Ajobaju, Chief Copy Editor
Pipeline vandalism, oil theft, shortage of gas, and a lack of infrastructure have combined to cost Nigeria Liquefied Natural Gas (NLNG) about $7 billion in revenue in the past 12 months.
NLNG Managing Director Phillip Mshelbila made the disclosure at the 45th Nigeria International Conference and Exhibition (NAICE) 2022 in Lagos.
Mshelbila, represented by NLNG Production General Manager Adeleye Falade, said the company has capacity to produce 22 million tonnes per day and is currently at 99.4 per cent availability but utilisation is 68 per cent.
He said the 31.4 per cent difference between availability and utilisation translates as about $7 billion lost revenue between July 2021 and July 2022.
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Lack of infrastructure
Mshelbila lamented that a lack of vital infrastructure like the Abuja-Kaduna-Kano (AKK) Pipeline and also a lack of pipelines in the eastern corridor for gas distribution impact negatively on the production of NLNG, as Nairametrics reports.
“I’ve spoken eloquently about the AKK Pipeline. In the eastern corridor, we also don’t have enough pipeline distribution pipeline. But the ones that we have, what has happened to them? he asked.
“Today, Trans-Niger Pipeline, which is the main artery in the eastern region, has been down since March. We don’t know when it’s going to come back.
“As a result of that, I don’t have gas in the LNG to run my plants. Currently trending 99.4 per cent year-to-date availability, my utilisation is moving around 68 per cent.
“The data between that 68 per cent and the 99.4 per cent is equivalent of almost $7 billion revenue today, which would have found its way into our economy, which would have helped our government in a cash-constrained world. And I’m not talking about the impact of upstream.
“So what is the guarantee around the security of even the pipeline that we have? And everybody has a role to play in that: government, security agencies, have a role to play.”
Based on the Decade of Gas policy, Mshelbila said, there is a gap of three billion cubic feet (3BCF) between gas demand and supply, raising doubts about bridging that gap considering the lack of infrastructure and investment.
Nigeria loses 95% oil production to thieves
Nigeria has disclosed losing about $1 billion revenue to pipeline vandals and oil thieves in the first quarter of 2022.
Heirs Holdings Chairman Tony Elumelu announced earlier in the year that Nigeria is losing more than 95 per cent of its oil production to thieves.
This prevents Nigeria filling the gas supply gap in Europe and other developed economies created by the Russian-Ukrainian war, despite pressure from the European Union (EU) for additional supplies.