Nigeria loses N7bn as Shell shuts Trans-Niger Pipeline

Nigeria loses N7bn as Shell shuts Trans-Niger Pipeline

Nigeria has lost a minimum of $35.139 million, about N7.029 billion,
over the last three days, as Shell Nigeria, yesterday, said it has shut
down the 180,000 barrels of crude oil per day Trans Niger Pipeline.

According to a statement by Shell, the company shut down the
pipeline, May 12, but failed to state the reasons for the shut down and
when it would be reopened. The Trans Niger Pipeline is critical to
Nigeria’s crude export as it carries Nigeria’s crude oil, Bonny Light, to
an export terminal.

Traders told Reuters that Bonny Light loadings have been delayed by
up to four days over the past week. The Trans Niger Pipeline,
according to Shell, transports around 180,000 barrels per day of crude
oil to the Bonny Export Terminal and is part of the gas liquids
evacuation infrastructure, critical for continued domestic power
generation and liquefied gas exports.

The Central Bank of Nigeria puts the average price for Bonny Light at
$65.07 per barrel. This means that for every day that the pipeline is
shut, Nigeria will be losing a minimum of $11.713 million, about N2.343
billion.

The Nigerian National Petroleum Corporation, NNPC, had a couple of
weeks ago, lamented the recent increase in the attack on crude oil
and gas pipelines across the country, stating that the country is losing
about 60,000 barrels of crude oil and condensates daily whenever
there is a pipeline break. The NNPC had also stated that over 50
attacks were launched by vandals on the nation’s crude oil and gas
pipelines in the last six months.

Group Executive Director, Gas and Power of the NNPC, Mr. David Ige,
had stated that apart from the loss of revenue from crude sales, the
vandalisation of the pipeline is expected to worsen the country’s
power situation as a number of power plants relying on gas supply
from the pipeline will be starved of gas to generate electricity. Ige
lamented that between January and February 2015 alone, the Trans-
Forcados crude oil pipeline was attacked and vandalised four times,
adding that none of the corporation’s gas pipelines has been able to
run two straight days without being brought down.

Ige, however, stated that the NNPC was exploring a number of options
on how to tackle the pipeline vandalism menace, ranging from an
aggressive community engagement to installation of technological
gadgets to stave off the vandals. He called for a holistic approach to
resolving the pipeline vandalism scourge ranging from tightening
security to expeditious judicial enforcement, to bring to an end the
menace which has deprived the country of several billions of revenue.

Also, Nigerian Gas Company, NGC, a subsidiary of the Nigerian
National Petroleum Corporation, NNPC, had in few days ago, stated
that Nigeria has lost a minimum of N8.04 billion since January, to the
incessant vandalism of gas pipelines. Managing Director, NGC, Mr.
Dafe Sejebor, disclosed that since the beginning of this year the
country has witnessed an unprecedented increase in the spate of gas
pipeline vandalism.

He added that within the last two months, it has recorded three major
attacks on its pipeline network, mainly in the Niger Delta region.
According to him, whenever these pipelines are sabotaged, we are
forced to shut down the pipeline, and we defer a minimum of 200
million Standard Cubic Feet, SCF, of gas per day.