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NNPC loses N174b due to pipeline vandalism, products” losses

The NNPC says it lost  more than N174 billion to pipeline vandalism and the resultant petroleum products’ losses within the last 10 years. The Group Managing Director of NNPC, Mr Mohammed Barkindo, said this in Abuja on Tuesday, while making presentations to the leadership of the police and defence forces.

A statement by Dr Levi Ajuonuma, the Group General Manager (Public Affairs) of NNPC, quoted Barkindo as saying that illegal bunkering, pipeline vandalism and products” theft had particularly impacted on the capacity of Nigeria”s oil and gas assets to function optimally.

“NNPC has provided graphic details of how the activities of pipeline vandals have complicated the free flow of petroleum products and crude supply in its pipeline system. This has led to a colossal loss of over N174.57 billion incurred from product losses and repairs of pipelines within the last 10 years.

“Barkindo explained that the activities of the pipeline vandals have made it impossible for the NNPC facilities to function optimally,” the statement said.

It said that that the combined capacity of all the 21 Pipelines and Product Marketing Company (PPMC) depots nationwide, excluding holding capacities at refineries, could provide products” sufficiency of up to 32 days for petrol, 65 days for kerosene and 42 days for diesel. The statement said that Barkindo said that 16,083 instances of pipeline breaks were recorded within the last 10 years.

“Some 398 pipeline breaks, representing 2.4 per cent of the affected pipes, were due to ruptures,’’” it said. The statement said that activities of vandals accounted for 15,685 breaks, representing about 97.5 per cent of the total number of cases.

“According to records, the System 2E/2EX, which conveys products from the Port Harcourt refinery to Aba-Enugu-Makurdi depots, onwards to Yola-Enugu-Auchi, appears to be the haven of pipeline vandalism in the country, particularly in the Port Harcourt-Aba/Isiala-Ngwa axis. In all, 8,105 breaks were recorded along the System 2E within the period, representing about 50.3 per cent of the total number of products pipeline breaks in the country.  The attacks left the NNPC with a cost of N78.15 billion in product loses and pipeline repairs.

“The System 2A product pipeline route, which conveys products from Warri-Benin-Suleja/Ore depots, ranks second on the scale of pipeline break points. It recorded 3,259 cases, representing about 20.2 per cent of the total volume of product pipeline breaks in Nigeria.“The figure also came with a loss of over N20.39 billion in products losses and pipeline repairs.

The System 2B, which carries products from the Atlas Cove-Mosimi-Satelite-Ibadan-Ilorin depots, recorded 2,440 breaks, leading to a loss of over N73.6 billion in products losses and pipeline repairs,” the statement said.

It said that Barkindo noted that incessant attacks on the Trans-Forcados Pipeline (TFP) had rendered the pipeline out of service since May 2009, thus making it impossible to evacuate crude oil/condensate from some Shell facilities. Currently, over 300,000 barrels per day and 140 million standard cubic feet of gas are deferred and about 55 vandalised points have so far been repaired at a cost of N11 billion.

“The NNPC spent over 42.952 million U.S. dollars (about N6.4 billion) to execute a two-phase repair work, which started in September 2009 on 74 damaged points in System 2C-1 of Escravos-Warri crude oil pipelines to enable the start-up of the Warri and Kaduna refineries.  Crude oil was introduced into the Warri-Kaduna segment on the 9th of February.  Since then, 47 line breaks for crude theft have occurred on this segment, resulting in condensate loss and repairs at an additional cost of N1.66 billion,’’” the statement said.

It said that Barkindo, therefore, called for the intervention of the armed forces in stemming pipeline vandalism and securing the vital national assets. Vandalism of oil and gas pipelines remains the most critical challenge facing our industry.  The amnesty policy of Federal Government appears to be working but some criminal elements are still at work,” the statement quoted Bakindo as saying.  It said that the NNPC chief stressed that for the deregulation of the downstream sector to be successful; there was the need for the country”s refineries to remain operational without incidences of pipeline vandalism.

The statement noted that in the last 24 hours, three pipeline points were vandalised across the country. It said that Mr Ogbonna Onovo, the Inspector-General Police, pledged the readiness of the police to assist the NNPC in its efforts to fulfill its mandate. “We have a collective responsibility of serving the Nigerian people. I cannot imagine what Nigeria would be without proceeds from oil and gas. So, we have a duty to protect the vital treasure base of the nation. We are together on this and we will do our best in this regard,” Onovo was quoted as saying in the statement.

Similarly, the Chief of Defence Staff, Air Marshal Paul Dike, pledged the preparedness of the armed forces to continue to provide security cover for oil facilities in the country. The statement said that Dike suggested the introduction of electronic devices for the protection of pipelines to complement services of the defence personnel. We will stop at nothing to ensure that the NNPC continues to record successes in the oil and gas sector and we also want to thank the NNPC for its support to the defence forces,” Dike was quoted as saying.


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