Global Processing

Shell closes Nigerian crude oil pipeline

March 4, 2014

<photocredit>Photo copyright Shell</photocredit>

Royal Dutch Shell announced that its Nembe Creek Trunk oil pipeline in Nigeria was closed on Feb. 23 because of a leak caused by theft.

Precious Okolobo, spokesman for the company's Nigerian unit, told Dow Jones Newswires that a leak had been discovered and the pipeline had to be closed to have the "crude theft points" repaired. The pipeline operations will resume as soon as possible, he explained. The exact volume of crude output that will be lost as a result of the pipeline shutdown was not announced and Okolobo said he did not have the exact figures.

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The Nembe Creek Trunk pipeline, which has a capacity of 150,000 barrels of crude oil per day, has been closed down several times before after similar incidents. In December 2010, Shell Nigeria replaced the pipeline in a major improvement project, worth $1.1 billion, but since then it has repeatedly been a target of crude thieves, the Wall Street Journal reported.

According to Mutiu Sunmonu, head of Shell's Nigerian unit, theft attempts last year resulted in about 60,000 barrels a day being stolen, which made the company close down the pipeline on numerous occasions and led to many oil spills that caused damage to local ecosystems. It is believed that most attempts to steal crude were made by people who then sold it on the international market.