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UPDATE 2-Shell resumes output at Nigeria Utorogu gas plant

Published 08/27/2009, 09:40 AM
Updated 08/27/2009, 09:48 AM
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* Utorogu gas plant restarts operations Aug. 19

* Shell says Soku gas plant still idle

* Nigeria has lost 80 LNG cargoes since Nov

(Adds industry source, background)

By Randy Fabi

ABUJA, Aug 27 (Reuters) - Royal Dutch Shell resumed operations at its Utorogu gas plant in Nigeria's southern Niger Delta last week, but the firm has yet to complete repairs at its Soku facility, a company spokesman said on Thursday.

Utorogu was shutdown on Aug. 13 for repairs after the Escravos-Lagos pipeline, which carries gas from the Niger Delta to the commercial hub of Lagos and other parts of southern Nigeria, was attacked by thieves.

"We shut in the Utorogu gas plant as a precaution after the attack on the Escravos-Lagos pipeline. As soon as repairs were completed, production resumed," said spokesman Tony Okonedo.

Nigeria is Africa's biggest oil and gas producer but thieves take a sizeable proportion of its output by drilling into pipelines or hijacking barges loaded with oil, a type of theft known locally as "bunkering".

Thieves also caused the shutdown of Shell's Soku gas plant in southern Nigeria last November. The facility remains idle for repairs despite a brief restart in April.

"It was up for four days, but is back down again after they attacked it again. It's condensate theft," he said.

The closure of Soku has cut operations at Nigerian LNG, which supplies 10 percent of the world's liquefied natural gas, to around 50 percent of capacity.

The OPEC member has lost an equivalent of around 80 LNG cargoes, each worth around $15 million and carrying an average of 145,000 tonnes of supplies, an industry source said. Nigeria LNG exports an average of 20 cargoes per month.

LNG is gas cooled to liquid form and shipped in special tankers to markets in the developed world -- particularly Europe and the United States -- where it can be used for power generation or for making chemicals.

Nigeria LNG, which exports 22 million of compressed gas, is controlled by a group of Western companies including Shell, Total and Eni unit Agip. State-run NNPC owns 49 percent. (Editing by Nick Tattersall and Keiron Henderson)

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