Armed group says it attacked troubled Niger-Benin oil pipeline

The new Niger-Benin crude oil pipeline, already caught in a political spat between the two countries, is facing a fresh crisis after an armed group said it had taken a section of it out of commission.

The 110,000 b/d pipeline linking landlocked Niger's Agadem Rift basin oil fields with Benin's Seme port saw its first cargo lifted on May 19 -- 1.1 million barrels of heavy sweet Meleck crude.

That could be the only cargo for some time, however, after an apparent attack by the Patriotic Liberation Front (FPL), an armed group in Niger that opposes the country's military junta, which seized power in a 2023 coup.

Just days earlier, on June 14, a deepening row between Niger and Benin led Niamey to halt crude exports through the pipeline, sources told S&P Global Commodity Insights.

The FPL "carried out its threat by putting a major section of the pipeline out of commission as a first warning to the junta," the group announced on its Facebook page, adding that it "reminds the Chinese partner of its demand to cancel the $400-million loan promised to the Niamey putschists, failing which all oil installations will be paralyzed."

The $400 million relates to an export deal with China National Petroleum Corp (CNPC), the builder of the pipeline.

In a separate post, the group warned: "The FPL doesn't make empty threats. As long as the $400 million is not stopped, other actions will follow."

Commodity Insights could not independently verify the attack claim. Niger's government and the pipeline's Chinese backers have not commented on the potential attack.

Obstacles

The pipeline is set to quintuple Niger's oil production and provide Benin with transit fees. When it lacked an export route, Niger produced just 20,000 b/d of heavy oil, most of it consumed locally or trucked into neighboring Nigeria.

The first cargo was shipped to France's For-sur-Mer refinery and marked an additional 100,000 b/d of non-OPEC+ crude hitting the market just as the Saudi Arabia and Russia-led alliance is struggling to stabilize the oil market.

The pipeline has faced significant obstacles since Niger's ruling junta overthrew president Mohamed Bazoum in July 2023, leading regional bloc Ecowas -- of which Benin is a member -- to impose tough sanctions on Niamey. While Benin reopened its border with Niger after the sanctions were lifted in March, allowing CNPC to complete the pipeline, Niger has not returned the favor.

On June 5, Beninese authorities detained five people for allegedly trying to illegally enter Seme port, accusing two of them of being agents of Niger's junta. In a press conference in response, Niger's oil minister Mahamane Moustapha Barke Bako insisted the people were at the facility to supervise crude liftings.

Then, on June 13, the day before Niger halted exports through the pipeline, unidentified militants attacked soldiers guarding the pipeline in the southeastern Dosso region, killing six Nigerien soldiers, according to Reuters.

Meanwhile, the Chinese-owned Elandra Eagle crude tanker has been sitting beside the Seme terminal since June 1 waiting to load the project's second crude cargo, according to ship-tracking data from S&P Global Commodities at Sea.

Meleck has a 24.4 API gravity and sulfur content of 0.354%, according to CNPC, making it comparable to Angola's Pazflor and Dalia grades, which are sold primarily into China. Platts, part of Commodity Insights, last assessed Dalia at $82.36/b on June 17.