Pipeline closure: Shell lost N14.5bn in six days

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Royal_Dutch_ShellShell Petroleum Development Company Joint Venture has lost $90m (N14.6bn) in six days following the closure of Trans Niger Pipeline.

The Manager, Corporate Media Relations, SPDC, Mr.  Tony Okonedo, on Tuesday, confirmed that the total daily loss from the TNP shutdown was $15m (N2.4bn).

This, analysts said, amounted to $90m (N14.6bn) from June 12 to June 17, 2013. They added that the oil company would have lost another $90m if the pipeline remained closed in the next six days.

The Trans Niger Pipeline was shut down in June following a fire incident. Six days after it was reopened, however, SPDC shut the pipeline again on July 11 due to a leak at the Bomu-Bonny section at Owokiri.

The shutdown of the TNP system, comprising the 28-inch and 24-inch streams, resulted in the deferment of 150,000 barrels of oil per day and huge revenue loss to the Federal Government.

“With the 28-inch TNP already shut in for removal of illegal oil theft connections, a total of about 150,000 barrels per day of oil has been deferred, SPDC said, while lamenting that the TNP had been variously targeted by crude oil thieves in recent months and shut down several times to enable the removal of theft points.

However, the latest impact of the pipeline closure was the shutting down of the 624 mega watts Afam VI Power Plant by SPDC.

The company, in a statement on Tuesday, said the 624mw power plant was shut down due to gas shortage arising from the closure of the TNP as a result of crude oil theft-related leaks.

Okonedo said TNP closure had also led to tank tops and non-evacuation of condensate from Okoloma Gas Plant, which supplies Afam VIPower Plant with feed gas.

In view of this, Okonedo said the power plant was shut down and a whopping 624mw removed from the country’s poor power generation.

He said, “SPDC had to shut down Okoloma Gas Plant today(Tuesday) as it could not continue to produce gas without the evacuation of condensate. Afam VI Power Plant was available at 624MW capacity, but supplying only 105MW to the national grid due to reduced gas volume at the time of shutdown.”

According to him, SPDC is deeply concerned about the negative impact of incessant crude theft activities on lives and environment in the Niger Delta, and also the loss of electricity to businesses and households across the country.

He explained that the latest leak on the TNP occurred on the 24-inch stream at Owokiri on July 11; adding that a Joint Investigation Visit of government agencies, community and civil society representatives as well as SPDC personnel found that unknown persons had installed a 6-inch crude theft valve on the facility.

 

Information from Punch was used in this report.