Shell shuts-in 150,000 barrels of crude over pipeline fire

Nigeria crude output dropped by an additional 150,000 barrels per day, as Shell Petroleum Development Company, SPDC, yesterday, shut down a section of its Trans Niger Pipeline, TNP, due to a fire outbreak along the pipeline’s right of way.

The Federal Government, as a result of the shut down, is losing about $16.05 million (N2.568 billion) daily, going by a crude oil price of about $107 per barrel.

According to a statement by the company, the fire outbreak was reported Monday, within

the SPDC Joint Venture right-of-way at Patrick Waterside, Bodo, Ogoniland and close to the Trans Niger Pipeline (TNP), even as investigations and repair work continue on last week’s spills in the area.

Mr. Precious Okolobo, Corporate Media Relations Manager, Shell, who signed the statement, said, “The entire TNP system, comprising the 24-inch line and 28 inch line had been closed on October 9 as a precautionary response to the spills, but the 28” TNP was reopened shortly after investigations established that the leaks were on the 24 inch line only.

“However, the 28-inch TNP has now been shut in again due to the fire at Patrick Waterside. The fire has now gone out but the 28-inch will remain closed until checks are carried out. “This means that the entire TNP is shut-in, resulting in production of 150,000 barrels of oil per day being deferred. The force majeure on Bonny Light exports remains in place.”

Continuing, he said, “Investigations into the earlier incidents showed that unknown persons had drilled holes on the 24-inch TNP at B-Dere, while an excavation was observed at Bodo West. Investigation into the spill at Nonwa – Tai is continuing.

“Meanwhile, SPDC is taking appropriate actions to minimize impact on the environment and ensure the safety of members of the community, SPDC staff and its contractors.  SPDC will initiate clean-up and remediation, as well as provide relief materials and compensate those who may be impacted upon establishment of volume and impact of any operational spill as determined by the JIV report.”

Shell, had last week, due to rising incidences of pipeline vandalisation and crude theft, announced plans to sell off its 97-kilometer, 150,000 barrels of oil per day Nembe Creek Trunk Line in the Niger Delta region.

The company, along with its joint venture partner, is also planning to sell off four more oil blocks — Oil licenses 18, 24, 25 and 29.

The Nembe Creek Trunk Line, a key oil transport channel, which Shell has repeatedly shut this year after attacks by oil thieves and the four oil blocks feed the Bonny terminal, Nigeria’s oldest export facility, commissioned by Shell in 1961.

Sources close to the company, said the joint venture, which also includes Total and Eni, has sent out offer documents for the oil blocks.

According to Wood Mackenzie, the four blocks produced 70,000 barrels of oil and natural gas liquids last year, roughly 10 per cent of the joint venture’s total production and eight per cent of Shell’s total production in Nigeria.