Royal Dutch Shell Plc (NYSE:RDS-A) said the $1.1 billion Nigerian pipeline is close to being completed, which will be used to transport oil to its Bonny export terminal.
The 60-mile long pipe will be able to transport approximately 600,00 barrels of crude oil a day to the Atlantic coast terminal.
Shell said the pipeline was built to replace a number of old pipelines, and will draw oil from 14 stations around the region.
Unfortunately this will do little to curb the notorious theft of oil from Nigerian pipelines, which results in oil spills from the damage to the pipelines coming from the thieves tapping into them and extracting the oil to resell to offshore vessels.
Through 2009, oil production over the last several years had dropped over 25 percent from the roving, armed gangs stealing the crude and damaging the pipelines.
After an amnesty offered by the government some of the activity decreased, but Shell said they see it picking up again.
It looks like this new pipeline will suffer the fate of the previous ones, but there's nothing Shell can do about that if they want to continue to produce oil in the area.
Now it's a cost of doing business, put a high one to pay, as they've replaced close to 1,000 kilometers of pipelines over the last several years.
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