Nigeria loses N4.7bn daily to Bonny Export Terminal pipeline damage

Current efforts by government to raise cash and redirect the economy to growth may be at risk, as the country is faced with an estimated loss of N4.7 billion ($15,180,000) daily, following damage done to the trunk line which supplies crude oil to the Bonny Export Terminal in Rivers State.
This figure is arrived at based on the calculation that the pipeline gets supply from the Nembe Creek Transmission Line (NCTL) which has capacity to supply 150,000 barrels of crude per day, as well as the 180,000 barrels per day capacity Trans-Niger Pipeline (TNP).
These are the two major pipelines through which Shell and other upstream companies operating in the Eastern Niger Delta evacuate their crude to the Bonny Export Terminal.
However, about 600,000 barrels of liquids can be evacuated at the Cawthorne Channel end of the facility.
This development is coming on the heels of expectations that efforts to ramp up crude oil output yields as it was being expected that loading of Forcados crude grades would resume this week after the spectre of force majeure is lifted.
Last week, media reports stated that Forcados crude stream is set to resume at the end of September, since restrictions were placed in February following a declaration of force majeure by Shell Petroleum Development Company (SPDC).
Meanwhile, SPDC said yesterday that it is still investigating the incident.
Igo Weli, the company’s general manager , external affairs, told BusinessDay that the pipeline affected is about 34 kilometre and it would take a while to conclude investigation, saying that its joint venture partners are aware of what Shell is doing.

A loading programme issued for October includes orders for the cargo for the grade according to trade sources Reuters asked.
October exports are expected to be around 230,000 barrels per day, according to a preliminary loading list.
The situation however, with the country’s biggest export crude, Qua Iboe, is not clear, as officials of the company who spoke with BusinessDay deny media report that loading would resume from there this week, after the force majeure declared by ExxonMobil in the wake of a wave of militant attacks which forced the company to shut operations in Eket.
“There is no operational development as regards loading of crude cargoes from the Qua Iboe terminal yet, I don’t Know where they got their reports from,” an official said.
According to the Nigerian National Petroleum Corporation (NNPC) monthly financial operations report released last week, crude oil production in Nigeria rose to 1.77mbopd due to completion of repairs, along with no new major attacks since mid-June, 2016. But this was however still 10.72% lower than June, 2015 production (the second lowest in over two decades).
The NNPC reported that crude volumes from Production Sharing Contracts (PSC), mainly deep-water assets, remained steady, compared to Joint Venture (JV) & Independents producing predominately from Onshore and Shallow water locations impacted by security breaches and militant activities.
“Onshore and shallow water assets were severely damaged by militant activities. Hence, securing Onshore & Shallow water locations which are the predominant terrain for JV production is of Priority & Critical to production restoration,” the report said.
The relative lull in militant activity is helping to shore up crude oil production which to rose 1.77million barrels per day in July. NNPC reported about 311 vandalised points on oil and gas infrastructure in Nigeria in the month of July.
There are also bright prospects for gas. Out of the 205.90 BCF of gas produced in July 2016, a total of 114.86 BCF of gas was commercialised, comprising of 20.30 BCF and 94.56 BCF for the domestic and export market respectively. This translates to an average daily supply of 654.78 mmscfd of gas to the domestic market and 3,050.40 mmscfd of gas supplied to the export market.
This implies that 55.78% of the total gas produced was commercialised, while the balance of 44.22% was either re-injected, used as upstream fuel gas or flared. Gas flare rate was 10.58% for the month of July 2016 , which is 702.83 mmscfd compared with average gas flare rate of 8.87% i.e. 668.91 mmscfd for the period August 2015 to July 2016.
This 12th publication of NNPC Monthly Financial and Operations Report, however indicated a trading deficit of N24.18billion in July 2016 as against N26.51billion deficit reported in June, 2016, the net cash flow improved by 8.77% or N2.32billion in July 2016.
“This improvement was largely due to increase in revenue stream from NPDC and PPMC, despite the upsurge in upstream and downstream vandalised points. NPDC, substantial portion of crude oil sales for the month estimated to be in excess of N27Billion could not be realised due to Force Majeure declared by SPDC as a result of vandalised 48-inch Forcados export line,” the report said.

 

Olusola Bello