NLNG Declares Force Majeure as Flood Halts Gas Supply
By Adedapo Adesanya
Nigeria Liquified Natural Gas (NLNG) has declared force majeure due to the widespread flooding that has disrupted supply in the country.
A force majeure clause in a contract releases a party from fulfilling their contractual obligations when circumstances beyond their control impede them.
A spokesman for the company, Mr Andy Odeh, said on Monday that all NLNG upstream gas suppliers had declared force majeure, forcing it to make the declaration as well.
“The notice by the gas suppliers was a result of high floodwater levels in their operational areas, leading to a shut-in of gas production, which has caused significant disruption of gas supply to NLNG,” Mr Odeh said.
Mr Odeh said NLNG was determining the extent of the disruption and would try to mitigate the impact of the force majeure.
The flooding, happening in over 20 states in Nigeria, has killed more than 600 people. It has, according to estimates, displaced 1.4 million and destroyed roads and farmlands.
Authorities have warned that the flooding, caused by unusually heavy rains and the release of water from a dam in Cameroon, could continue into November.
Nigeria Meteorological Agency (NiMet) said that states in the North-Central and South-East zones in Nigeria should expect more flooding, while the National Emergency Management Agency (NEMA), called for adherence to the Seasonal Climate Prediction by NiMet and the Flood Outlook by the Nigeria Hydrological Services Agency (NIHSA).
The flood has already threatened the food supply and this declaration could worsen Nigeria’s cash crunch and will curtail global gas supply as Europe and others struggle to replace Russian exports due to the invasion of Ukraine in February.
With an estimated 209 trillion cubic feet of natural gas reserves, Nigeria is the largest gas-producing nation in Africa and 10th globally. It produces 8 billion cubic feet of gas daily, according to the Nigerian Upstream Petroleum Regulatory Commission.
The NLNG, which is jointly owned by the Federal Government and three international oil companies, was established in 1989 to harness Nigeria’s vast natural gas resources and produce LNG and natural gas liquids for export, but it started operations in 1999.