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Manufacturers lose N22b to Shell gas cut

by Business News Report

The cut in gas supply to no fewer than 87 manufacturing companies in the Agbara and Ota industrial belts of Lagos and Ogun states has cost manufacturers about N22b in the past three weeks, manufacturers, whose businesses have been affected, have cried out.
Four manufacturers, who called our correspondent to complain of the problem, lamented that their businesses had witnessed the worst setback since crisis since the incident, which they blamed on the Shell Petroleum Development Company (SPDC) that supplies the two areas with gas.
But the major twist to the ugly development is that whereas one of the manufacturers, an indigenous outfit lamented that its firm, a large scale food processing plant had lost an average of N300m in the first week of the problem, the Nigeria Gas Company (NGC) that regulates industrial gas consumption and supply, claimed ignorance of the development.
But another officer of NGC at the Lagos office accepted that unofficially, the regulating company was aware but Shell does not want the matter to become a public issue as it did not formally inform NGC of the problem.
The official said that the NGC had no problems with gas supply to Shell and wondered why the problem had not been sorted out before now.

One of the manufacturers said on Tuesday, October 28, Shell sent emergency emails to the manufacturers declaring Force Majeur on supply, implying there is unforeseen development that would disrupt supply. The excuse they gave for the development was pipeline vandalism. But they didn’t give a date for the return of gas.
“Last Monday and Tuesday, we had some pressure in the line, but there was no supply. But after that initial mail, Shell has not replied all our subsequent inquiries on the return of supply. It has always been evading the question and promising to get back to us without any action. While few manufacturers, especially the multinationals have sought alternative source of power for their production, most of us that have no alternatives have been totally out of business these two weeks. We need immediate intervention to save the situation and the economy from total collapse,” a manufacturer said.
“We therefore want the management of the NGC to investigate why Shell would bring the economy to a total stop even when we pay for the service they have refused rendering us in two weeks. We have incurred heavy and untold losses, and don’t even know when the end would be,” the manufacturer that spoke for the affected firms lamented.

But in a swift reaction yesterday, Shell Petroleum Development Company of Nigeria said it regretted the cut in gas supply to the industrial belts, blaming the situation on leakage caused by illegal connections to its facilities.
Media Relations Manager of Shell, Precious Okolobo, in a statement made available to Vanguard in Abuja, explained that the delay in effecting repairs on the gas transmission lines to Ota was caused by the complex location of the two leaking lines.
Okolobo said that while one of the leaks is at the bank of creek, the other is in the middle of a creek. Okolobo said: “SNG declared force majeure on the gas supply effective October 1, 2014 when the leaks were discovered and later shut gas supply to customers to protect lives of people and the environment.
“SNG regrets the shortfall in gas supply and is working hard to ensure that the leaks are repaired as soon as possible,” the company said.

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