Nigerian firm says it can't ship natural gas after flooding
A major Nigerian energy company says it can't deliver natural gas as promised in its contracts after deadly flooding hindered its operations
ABUJA, Nigeria (AP) — A major Nigerian energy company says it cannot deliver natural gas as promised in its contracts after deadly flooding hindered its operations, raising concerns about whether Africa's largest economy can meet increased local and international demands during an energy crisis provoked by Russia's war in Ukraine.
Nigeria LNG Limited, or NLNG, declared a “force majeure" this week, meaning it is unable to fulfill its contractual obligations to supply the fuel used around the world to generate electricity, heat homes and run factories after flooding led to a “significant disruption of gas supply.” About 3.8% of global monthly supply could be affected, risking higher prices, Rystad Energy said.
The NLNG is a joint venture between the Nigerian government, which is the majority shareholder, and energy giants including London-based Shell and Italy's Eni. With capacity to produce over 20 million tons of liquefied natural gas, or LNG, per year, it is Nigeria's largest gas firm, but its production capacity was only at 68% because of oil theft and pipeline vandalism that has plagued the country.
As Europe faces an energy crisis after Russia sharply reduced natural gas flows during the war in Ukraine, Nigeria and other African countries have agreed to work toward helping meet the European Union's need for increased gas supplies. Nigeria has Africa’s largest natural gas reserves, but its capacity to meet such demands has come under question, even as European storage levels have managed to reach 92% ahead of the winter heating season and gas prices have fallen lately.
