Due to widespread flooding that has disrupted supply, Nigeria LNG has declared force majeure, a company spokesman said on Monday.
The declaration may make Nigeria’s financial crisis worse and will reduce the amount of gas available globally as Europe and other countries struggle to replace Russian exports following 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.
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.
NLNG’s supply had already been limited due to prolific oil theft that has slashed output from what is typically Africa’s largest exporter. NLNG exported roughly 18 cargoes in September, according to Refinitiv data.
Nigeria exports fossil fuels, which account for 90% of its foreign exchange and about 50% of its budget. Due to theft that has exceeded 80% on some pipelines, the average volume of crude oil exported in August fell below 1 million barrels per day (bpd), the lowest level since the 1980s.
The most populous country in Africa has not benefited from this year’s rise in oil prices due to crippling fuel subsidy costs.
