NLNG shuts operations over flooding, gas scarcity looms
The Nigeria Liquefied and Natural Gas company has declared force majeure because of widespread flooding that has disrupted supply, a spokesman for the company said on Monday.
Force majeure is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, epidemic or sudden legal changes prevents one or both parties from fulfilling their obligations under the contract.
Reuters reported that the declaration could worsen Nigeria’s cash crunch and would curtail global gas supply as Europe and others struggle to replace Russian exports due to the invasion of Ukraine in February.
NLNG 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 floodwater 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 said NLNG was determining the extent of the disruption and would try to mitigate the impact of the force majeure.
Flooding in Nigeria has killed more than 600 people, displaced 1.4 million and destroyed roads and farmland. Officials have warned that the flooding, caused by unusually heavy rains and the release of water from a dam in Cameroon, could continue into November.