FACED with the dwindling supply of gas from Nigeria, foreign consumers of the commodity have turned their search for the product to relatively peaceful countries and blocs to run their plants.
Nigeria has reportedly failed to meet its obligation to both existing and prospective customers of Liquefied Natural Gas (LNG) due to the wave of military in the Niger Delta where the resource abundantly exists and tapped.
The Guardian learnt that in desperation, such buyers have shifted their search and patronage to the Middle East and Russia.
It was gathered that with reduction in supply to the Nigeria LNG company by major gas producers, especially Shell, which production capacity has gone down by about 35 per cent, foreign buyers are unwilling to place fresh orders for the country's gas.
Industry sources said big customers like Enel of Italy, Botas of Turkey and Iberdrola of Spain, have directed their orders to countries like Qatar, Russia.
"These companies are now in the Middle East, Europe and Asia scouting for spare cargoes following the increasing insecurity in the Niger Delta and the inability of Shell to boost LNG production and ultimately supply from Nigeria," an official of a major gas producing firm said.
The Guardian further learnt that attempts by some Nigerian gas companies to woo the major buyers to sign contract for more LNG product from Nigeria have not yielded the desired result.
A senior official of the Nigerian National Petroleum Corporation (NNPC) corroborated this when he said "the issue of security of supply is very critical to the success of gas development in any society," adding that "the incessant shut-in of oil production, which has affected gas production, had sent negative signals to big time buyers, who are only comfortable in seeking for gas in regions where supply is guaranteed."
According to him, before any company signs a purchase contract, there must be ample evidence that supply would not be disrupted in such a way that product to the final consumers would be truncated.
"You cannot blame those buyers for looking elsewhere. Today, I can tell you that we are producing below the Organisation of Petroleum Exporting Countries (OPEC) quota. Shell cannot meet its supply volume to NLNG all because of crisis in the Niger Delta," he said.
The official stated that gas companies have not made significant progress in wooing stakeholders to take the Final Investment Decision (FID), especially on Trains Seven of the NLNG to begin construction.
He said Qatar and even Russia, a major gas producer in Europe, have enough capacity to meet the orders of foreign buyers.
Gas supply to NLNG, the fastest growing company in Nigeria, was disrupted when Shell facility was vandalised by militants in the Niger Delta. Another major supplier that has suffered in the face of insecurity in the Niger Delta is Italian oil firm, Agip.
But NLNG official, who spoke with The Guardian on condition of anonymity, denied the development, adding that it had not been formally made known to the company.
He said the recent happenings in the Niger Delta affect gas supply and that NLNG along with other partners (the gas suppliers) are discussing with the hope of getting excess capacity from their production to make up for shortfall in shell supply.
"We are targeting supply from Total's Akpo field. We are discussing with the suppliers with a view to getting excess supply to make up for the shortfall from Shell. Actually, Shell has not restored full supply to LNG plant in Bonny. We are still receiving about 30 per cent less.
"If our buyers are looking for alternative from other parts of the world, it is a welcome development but I think Qatar will have greater potential to look at," the official said.
"The issue of penalty does not arise because worldwide the crisis in the Niger Delta is known. All we need to do is to inform them if we are unable to meet our supply target or declare force majuere," he said.
Shell, the major supplier to NLNG plant in Bonny, had said it would be unable to meet its delivery dates to the company after it closed its Soku gas plant to repair pipelines.
It said the repairs were required after damage caused by thieves and illegal connection.
"In recent months, the number of illegal connections on pipelines has increased significantly and they are encroaching on the Soku plant itself, increasing safety risks to an unacceptable level," Shell Petroleum Development Company (SPDC) said.
SPDC is in a joint venture with NNPC, Total's unit, Elf Petroleum Nigeria Limited and Italy's Agip.
The Soku plant located in the swamps of the southern Rivers State supplies 40 per cent of the gas feed to NLNG, a project in which Shell has a 26 per cent stake.
NNPC holds 49 per cent in NLNG. Other shareholders in the gas venture are Total and Agip. NLNG supplies liquefied natural gas to markets in Europe and the United States (U.S.).