Finally, Nigeria LNG lifts force majeure

Nigeria Liquefied Natural Gas (NLNG) Limited, last Friday lifted the force majeure (FM) declaration made to its buyers and gas suppliers, a full month and six days after it announced it.

The company declared the FM on Friday June 21, 2013, after it lost all its product export capability due to the blockade of access to its terminal by the Nigerian Maritime Administration and Safety Agency (NIMASA), an agency of the Federal Government of Nigeria responsible for maritime safety and security.

“All incoming and outgoing cargo vessels to the NLNG Bonny Terminal (for LNG and NGL vessels), were stopped, forcing NLNG, as a prudent operator, to significantly reduce production in order to manage the LNG and NGL inventories in the available tankage safely and in an environmentally responsible manner”, according to a company statement signed by Kudo Eresia-Eke, the company’s General Manager, for External Relations.
“The June 21^st blockade was the second this year. The first was on May 3 which was lifted upon government’s intervention following which NLNG was directed to pay NIMASA about $159 Million in settlement of levies allegedly owed it from October 2009 – May 2013, and to continue paying the NIMASA levies, going forward”, the company narrated. Dissatisfied, NLNG paid $20 Million under protest and filed a suit at the country’s Federal High Court for determination of the legality of Government’s directive, as well as NIMASA’s claims. The company says that an interim injunction was granted by the court against the  Government and all its agencies (including NIMASA) from charging or collecting the NIMASA levies, or blocking access to NLNG facilities or detaining its vessels, until the determination of the Motion on Notice for interlocutory injunction already filed in the case. “NIMASA however proceeded against the court orders with a blockade of the Bonny Channel, denying entry or exit of ships from the NLNG Terminal”, NLNG lamented in the release. “When all efforts to have NIMASA obey the court order proved unsuccessful, the court varied the injunction to enable NLNG pay NIMASA, still under protest, on the 12^th of July 2013, without prejudice to the continuation of the substantive suit”. The company explained that it made payment thereafter, “and NIMASA eventually removed the physical blockade by mid- day of 13^th July 2013”.

 The substantive suit was adjourned to Thursday 19^th September 2013.
“Following the removal of the blockade, NLNG immediately commenced activities to restore normal operations, and has since been increasing the production levels, in a gradual manner as necessitated by plant design and safe operating procedures”.
The 6-Train NLNG Bonny complex finally reached its normal operating capacity on Friday, July 26, 2013, “such that export operations can be declared as being fully normalised. Consequently, the company has declared the current FM lifted to both buyers and gas suppliers.