Nigeria: LNG declares 'force majeure' over widespread flooding

Nigeria LNG, a liquefied natural gas-producing company has declared force majeure because of widespread flooding that has disrupted supply, its spokesman said on Monday.

The company said all of its upstream gas suppliers had declared force majeure, forcing it to make the declaration as well.

"The notice by the gas suppliers was a result of high flood water levels in their operational areas, leading to a shut-in of gas production which has caused significant disruption of gas supply to NLNG," spokesperson Andy Odeh said.

Odeh added that NLNG was "determining the extent of the disruption and would try to mitigate the impact of the force majeure". Flooding in the west African giant nation has killed more than 600 people, displaced 1.4 million and destroyed roads and farmlands. Officials have warned that the situation could continue into November.

According to Refinitiv data, supply had already been limited due to prolific oil theft that has slashed output from what is typically Africa's largest exporter. Roughly 18 cargoes had been exported in September.

Ninety per cent of Nigeria’s foreign exchange and about half of the country's budget are derived from the export of fossil fuels. However, organised theft and infrastructural challenges have for years led to a loss of the majority of its oil revenues, forcing the nation to keep taking out loans to service its hefty budget.

Reacting to the latest development, Portugal's oil and gas company Galp Energia said on Monday it may face additional sourcing disruptions.

Galp Energia said in a statement it had received a notice from Nigeria LNG (NLNG), its main natural gas supplier, about the force majeure but said "no information was provided to support an assessment of potential impacts".

Last week, the government had said "it could face gas supply challenges this winter, if Nigeria does not deliver all the liquefied natural gas (LNG) volumes due to its country".