Shell Declares Force Majeure on Bonny Light Exports over Pipeline Leak

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Shell Petroleum Development Company (SPDC) has declared force majeure on exports of Bonny Light grade of crude oil due to a leak, which led to the closure of the Nembe Creek Trunkline (NCTL).

This development is a major setback to Nigeria’s crude exports, which have been plagued by militant attacks in recent days.

Aiteo-operated NCTL and the Trans Niger Pipeline (TNP) are the two major pipelines in the Eastern Niger Delta that transport crude oil production from SPDC, Aiteo and third parties in their Eastern operations to the Bonny Export Terminal in Rivers State.

The Aiteo group recently acquired 45 per cent stake in the 97-kilometre NCTL and the prolific Oil Mining lease (OML) 29 from Shell and other joint venture partners – Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited.

Shell has since handed over operatorship of the pipeline to the Aiteo Group.
A Shell spokesman, Mr. Bamidele Olugbenga Odugbesan, said in a statement wednesday that the company declared force majeure due a leak that forced Aiteo to close the pipeline.

“SPDC declared force majeure on Bonny Light exports effective 12:00hrs Nigerian time, May 10, 2016, following a leak that led to the closure of Nembe Creek Trunk line for repairs by the operator, Aiteo Eastern E & P Company Ltd,” he said.

Aiteo Group’s Director in Charge of Media and Government Affairs, Mr. Sola Omole, who confirmed the closure of the pipeline due to the leak, told THISDAY that the company had mobilised contractors to the site.
“There is a leak on the pipeline and we have sent out contractors to the site, which has been isolated. Contractors have been mobilised to site,” he explained

Omole, who ruled out sabotage, further stated that about 75,000 barrels per day to 78,000 barrels per day of Aiteo’s crude oil was affected by the closure.

“I don’t know the production of other companies that are putting product into the pipeline,” he added.
THISDAY, however, gathered that the pipeline has a capacity of 150,000 barrels per day but about 600,000 barrels of liquids can be evacuated at the Cawthorne Channel end of the facility.

Specifically, the NCTL transports crude oil from 14 oil pumping stations across the Nembe Creek, Krakama, Awoba, Ekulama and San Bartholomew oil fields and transport it to the Cawthorne Channel field and Bonny terminal for removal of water and export.

Incessant attacks and sabotage had forced Shell to replace the old line at a cost of $1.1 billion in 2010.
The new NCTL consists of five kilometres of 12-inch diameter pipeline from the Nembe Creek III manifold to the Nembe Creek tie-in manifold; 44 kilometres of 24- inch diameter pipeline from Nembe Creek to San Bartholomew; and 46 kilometre of 30-inch diameter pipeline from San Bartholomew to Cawthorne Channel.

Nestoil constructed a 49-kilometre pipeline, consisting of the 12-inch diameter, five-kilometre segment and the 24-inch diameter, 44-kilometre segment, transversing across 100 communities in both Bayelsa and Rivers States.
The second part of the project consisting of 46-kilometre, 30-inch diameter pipeline from San Bartholomew to Cawthorne Channel was executed by Italian oil field services contractor, Saipem.