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UPDATE 2-Two Nigerian oil pipelines shut down due to leaks

Tue, 20th Jan 2015 17:32

(Adds details on Forcados, Nembe Creek and section of TransEscravos shut down, no immediate comment from Seplat)

By Julia Payne and Libby George

ABUJA/LONDON, Jan 20 (Reuters) - Nigeria's Trans Forcadosoil and gas pipeline and related production as well as Shell'sNembe Creek line, carrying Bonny Light crude, were shut at theweekend, the ministry of power and Shell said in separatestatements on Tuesday.

The 150,000 barrel per day (bpd) Nembe line was shut on Jan.17 after a leak was found, which is still being investigated, aspokeswoman for Shell said. A section of the TransEscravos pipeline was also closed on Jan. 14 for works and toremove crude theft connections.

The pipelines are operated by Shell's Nigerian joint ventureSPDC. Traders said it was too early to tell whether the shutdowns would impact exports. Bonny Light exports were scheduledat 185,000 bpd in January and 170,000 in February. The grade isalso transported via the Trans Niger Pipeline.

A spokeswoman for Shell said there was no impact on BonnyLight exports at present.

Nigeria's power ministry said the Forcados pipeline wasclosed after a leak occurred at the Oteghele axis in thesouthern state of Bayelsa and there was no timeframe yet for theduration of the disruption.

"The minister of power ... has appealed for theunderstanding of electricity consumers, for the reduction inpower supply which this development may cause," the statementsaid.

The affected section of the Forcados pipeline is run bystate-owned Nigerian Petroleum Development Corporation, asubsidiary of the Nigerian National Petroleum Corporation. AnNNPC spokesman did not respond to a request for comment.

A spokesman for SPDC in Lagos said its production is linkedlower down the pipe and was not affected. Nigeria's SeplatPetroleum, which produces around 60,000 bpd andexports crude via the Forcados pipeline, declined to commentimmediately but said it would issue a statement later.

Two other incidents of vandalism occurred in early Januaryaffecting the 24-inch and 28-inch sections of the pipeline. Thedamage took about a week each time to repair before the pipelinewas back in use, the power ministry said.

The pipeline transports the Forcados crude oil grade. About260,000 bpd were scheduled to be exported in January and 210,000bpd in February.

"(The shutdown) takes some cargoes out of the market, but wealready had 10 days delay in Forcados," a trader said, addingthat two January cargoes had already been deferred to Februarywith a knock-on effect into March.

"This may cause further delays" he said, which would supportthe prices of other Nigerian grades. (Additional reporting by Camillus Eboh; editing by Tim Cocksand David Evans)

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