Navy Attacked

Gunmen in speedboats attacked Nigerian navy vessels guarding the country's main crude oil and liquefied natural gas (LNG) export terminals on Wednesday, the Nigerian military and security sources said.

The attackers hit gunboats protecting Bonny Island in the Niger Delta, home to an LNG terminal whose exports make up close to 10 percent of world supply and to Nigeria's biggest crude oil export facility, operated by Royal Dutch Shell.

"The intention was likely to surprise our troops, capture arms, ammunition and if possible snatch our gunboat," Lieutenant Colonel Sagir Musa, a spokesman for the joint military taskforce in the delta, told Reuters.

He said six speedboats had attacked navy gunboats close to the LNG terminal but that the gunmen were repelled. A member of the taskforce was wounded and several of the attackers were killed when two of their boats were sunk, Musa said.

No group has claimed responsibility.

The strike in the very heart of Africa's biggest oil and gas industry is the first since the region's main militant group, the Movement for the Emancipation of the Niger Delta (MEND), announced a ceasefire last month after a plea from elders.

The ceasefire followed six straight days of attacks in the eastern delta which forced Shell to warn it could not guarantee to meet oil export obligations from Bonny.

Industry executives say continued insecurity, as well as chronic funding problems hampering joint ventures with the state-run Nigerian National Petroleum Corp. (NNPC), mean production is stagnating in the world's eighth-biggest exporter.

Nigeria's foreign minister said this week that oil output was down to 1.5 million barrels per day (bpd), although the oil minister put the figure at 2 million bpd a few weeks earlier.

THREAT TO LNG

Militants in the Niger Delta have shut down around a fifth of Nigeria's oil production since early 2006 with a campaign of pipeline bombings and attacks on oil facilities, but the country's LNG exports have largely escaped the violence.

LNG is made by cooling and condensing gas to a liquid that is one six-hundredth its normal volume. It is shipped in special tankers to markets including Europe and the United States, and is generally considered more secure than oil exports.

Strong global demand for LNG as an alternative energy supply, particularly as volatile oil prices add to havoc in consumer economies, has heightened interest in Nigeria's gas reserves, estimated at 180 trillion cubic feet.

But insecurity is a major deterrent to new investment.

A worker in the Bonny LNG plant said he heard shooting which seemed to be less than half a kilometre from his living quarters. A private security source working in the oil industry said the assailants had fled into the narrow creeks around Bonny Island and that they may return for another strike.

Shell said it could not immediately confirm any details.

Bonny, in the southern Niger Delta, is home to Nigeria's only functioning LNG plant, controlled by a group of Western companies including Shell, Total and Eni unit Agip. State oil firm NNPC owns 49 percent.

It is also home to Nigeria's biggest single crude oil export terminal by volume, which is owned by SPDC, a joint venture in which Shell holds 30 percent and NNPC holds 55 percent. Local subsidiaries of Total and Agip hold the rest.

(Reuters)