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Shell Announces Force Majeure on Gas Supply in Nigeria
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Integrated energy major, Royal Dutch Shell plc announced a force majeure on gas supplies destined for the liquefied natural gas plant in Nigeria following a leak on the Eastern Gas Gathering System pipeline.
Following the discovery of a leak on the Eastern Gas Gathering System pipeline, which supplies the bulk of Shell’s gas to the Nigerian LNG plant, the company decided to halt the gas supply in order to find out the cause of the leak and undertake repair works. However, the plant continues to receive some supply via other pipelines, which has enabled it to sustain production and loading.
The Nigerian LNG plant on Bonny Island has the ability to process 22 million metric tons of the liquefied fuel a year, which is equivalent to 7% of the global supply. The plant also has the capacity to process 5 million tons of natural gas liquids.
Notably, this 16-year old Bonny Island facility has been jointly owned by the Nigerian National Petroleum Corp., Shell, Total S.A. and Eni SpA (E - Free Report) since its inception. The Nigerian National Petroleum Corp. has a 49% stake, while Shell holds 25.6%. Total S.A. and Eni SpA, on the other hand, have interests of 15% and 10.4%, respectively.
Headquartered in The Hague, the Netherlands, Shell is one of the largest integrated oil and gas companies in the world. It explores for and extracts crude oil, natural gas and natural gas liquids. It has interests in chemicals as well as in power generation and renewable energy. Shell recently decided to restart buying Iranian crude. Interestingly, the company is the second-largest energy player after Total S.A. to recommence trade with Iran since the country came out of sanctions.
However, Shell’s revenues, earnings and cash flow have been significantly hurt by weak natural gas prices, like its peers such as Sasol Ltd. (SSL - Free Report) . Also, attacks on the company’s local establishments by the Nigerian militants created another major problem.
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Shell Announces Force Majeure on Gas Supply in Nigeria
Integrated energy major, Royal Dutch Shell plc announced a force majeure on gas supplies destined for the liquefied natural gas plant in Nigeria following a leak on the Eastern Gas Gathering System pipeline.
Following the discovery of a leak on the Eastern Gas Gathering System pipeline, which supplies the bulk of Shell’s gas to the Nigerian LNG plant, the company decided to halt the gas supply in order to find out the cause of the leak and undertake repair works. However, the plant continues to receive some supply via other pipelines, which has enabled it to sustain production and loading.
The Nigerian LNG plant on Bonny Island has the ability to process 22 million metric tons of the liquefied fuel a year, which is equivalent to 7% of the global supply. The plant also has the capacity to process 5 million tons of natural gas liquids.
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Notably, this 16-year old Bonny Island facility has been jointly owned by the Nigerian National Petroleum Corp., Shell, Total S.A. and Eni SpA (E - Free Report) since its inception. The Nigerian National Petroleum Corp. has a 49% stake, while Shell holds 25.6%. Total S.A. and Eni SpA, on the other hand, have interests of 15% and 10.4%, respectively.
Headquartered in The Hague, the Netherlands, Shell is one of the largest integrated oil and gas companies in the world. It explores for and extracts crude oil, natural gas and natural gas liquids. It has interests in chemicals as well as in power generation and renewable energy. Shell recently decided to restart buying Iranian crude. Interestingly, the company is the second-largest energy player after Total S.A. to recommence trade with Iran since the country came out of sanctions.
However, Shell’s revenues, earnings and cash flow have been significantly hurt by weak natural gas prices, like its peers such as Sasol Ltd. (SSL - Free Report) . Also, attacks on the company’s local establishments by the Nigerian militants created another major problem.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>