By Bassey Udo
The management of the Nigeria LNG has denied that its plant was shut down as a result of flooding.
Although the company on Monday declared force majeure on product supplies from its production facilities on Bonny Island, its General Manager, External Relations and Sustainable Development, Andy Odeh, clarified the plant was in operation at a limited capacity, due to reduced gas supply from some of its upstream gas suppliers.
The clarification was contained in a statement on Thursday. The statement reads: “The attention of Nigeria LNG Limited (NLNG) has been brought to media reports, following the issuance of a statement declaring Force Majeure on Monday 17th October 2022, that operations at its facilities have been shut down due to flood.
“NLNG will like to clarify as follows:
“The Company’s plant is in operation, though at a limited capacity, due to reduced gas supply from some of its upstream gas suppliers.
“None of NLNG’s assets on Bonny Island or in any of its host communities are impacted by the flood.
“The Force Majeure is as a consequence of a similar notice by Upstream Gas Suppliers due to the impact of flood in their production facilities.
“NLNG is working with all critical stakeholders on mitigating the impact on product deliveries.
“NLNG continues to monitor the situation with Upstream Gas Suppliers and is evaluating the impact of the flood on its business.”
On Monday, the company said the declaration of force majeure on product supplies from its production facilities on Bonny Island followed the notification by all its upstream gas suppliers.
The company said the gas suppliers blamed their action on the high flood water levels in their operational areas, which led to a shut-in of gas production by their operations.
Odeh had said the stoppage of gas production resulted in significant disruption of gas supply to NLNG, which compelled it to activate force majeure clauses in accordance with the Sales and Purchase Agreements (SPA) provisions.
Force Majeure is a provision in a contract that allows parties to reschedule their obligations in the event of unforeseen extraordinary developments that directly prevents one or both parties from performing.
