Shell shuts down Trans Niger Pipeline

Shell shuts down Trans Niger Pipeline

Guardian – Oil has slipped from about $50 per barrel to below $45 in the last month as a rally spurred by supply disruptions in Nigeria and Canada, and falling U.S. output lost momentum.
Meanwhile, the Nigeria’s Trans Niger Pipeline, one of the two major pipelines that carry the country’s 130, 000 barrels per day of Bonny Light crude grade for export, has been shut down.

Specifically, August West Texas Intermediate (WTI) crude lost 24 cents, or 0.5 per cent, to $45.17 a barrel on the New York Mercantile Exchange while the September contract for global benchmark Brent was down by 26 cents, or 0.6 per cent, at $46.50 a barrel on the ICE Futures exchange in London. WTI and Brent crude prices lost more than seven per cent last week.

Spokesman for Shell Petroleum Development Company (SPDC), Precious Okolobo, who confirmed the shut down of the pipeline to The Guardian, said: “SPDC shut down the Trans Niger Pipeline following a leak at Gio in Ogoni land. We are working towards a joint investigation visit to unravel the cause of the leak, preparatory to repair of the line”.

Due to the shut down of the pipeline, Nigeria will be losing about 130,000 barrels per day crude oil export, which would cost the country about $6.8 million, an equivalent of N1.4 billion daily.

Eland Oil & Gas Plc on Monday said the closure of the Forcados pipeline system in the Niger Delta led to a 77 per cent fall in the amount of crude oil lifted in the first half of 2016.

Royal Dutch Shell Plc is the operator of the Forcados terminal, and Eland is awaiting news of when it will be reopened. However, Eland has found two alternative export options in order to diversify its options to ensure similar incidents do not happen in the future.

Eland has identified a barging option to utilise a tie-in point on the Benin river, which would allow Eland to ship oil using a shuttle vessel to an alternate terminal. The company has received barging proposals and expects to implement the operations subject to the economics and the start-up of the Forcados terminal.

The company said it also is evaluating potential routes for a plan to build a 6.0 kilometre pipeline which would extend an existing pipeline. The new pipeline would link the nearby terminal with the OML40’s existing export pipeline.

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