Shell Says $1.1 Billion Nigerian Crude-Oil Pipeline Is Nearing Completion

Royal Dutch Shell Plc’s Nigerian unit said it “is close to completing” a $1.1 billion pipeline that can transport 600,000 barrels of crude oil a day to its Bonny export terminal on Nigeria’s Atlantic coast.

The 97-kilometer (60-mile) Nembe Creek pipe collects crude oil from 14 oil pumping stations and is part of a program to replace old pipelines in the Niger River delta, the company said today in an e-mailed statement.

Shell, which has replaced more than 1,000 kilometers of pipelines in the last five years, said the improvements “will have only limited impact on oil spills, until widespread oil theft, sabotage and vandalism” abates.

Oil and gas operations in Nigeria suffer frequent disruptions as restive communities in the oil-rich Niger delta seek more benefits from the region’s hydrocarbon resources. Attacks by armed groups in the area cut the nation’s crude output by 28 percent from 2006 to 2009, according to data compiled by Bloomberg.

While attacks have reduced since thousands of fighters accepted a government amnesty last year and disarmed, Shell has reported an increase in the activities of oil thieves who tap crude from pipelines for sale to vessels waiting offshore.

Nigeria is Africa’s biggest oil producer and the fifth- biggest source of U.S. oil imports. Shell operates a joint venture in the nation in which it holds a 30 percent stake and state-owned Nigerian National Petroleum Corp owns 55 percent. Total SA has a 10 percent stake and Eni SpA holds 5 percent.

To contact the reporter on this story: Dulue Mbachu in Lagos at dmbachu@bloomberg.net

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