Eleven dead in gun battle at Nigerian pipeline

LAGOS (Reuters) - Three soldiers and eight militants were killed in a gun battle at an oil pipeline hub operated by Royal Dutch Shell in Nigeria's southern state of Bayelsa, the navy said on Sunday.

Shell said the Tora manifold, which sends oil to the Bonny export terminal, was not damaged in the attack late on Saturday and oil production in Nigeria, the world's eighth largest oil exporter, was unaffected.

"Some militants attacked the Tora manifold where we had some men. There was an exchange of fire and they killed three of our men. The militants lost eight," navy spokesman Henry Babalola said.

Shell is pumping about 400,000 barrels per day below its full capacity because of rebel attacks and kidnappings since 2006 that have contributed to a rise in world oil prices.

Rebels are demanding regional control over the Niger delta's oil wealth, as well as jobs, public services and compensation for pollution.

Sabotage and abductions have subsided since the inauguration of President Umaru Yar'Adua last April. Shell has begun to restore its lost output and militants have begun preliminary peace talks with the government.

The situation is confused by lawlessness and corruption in the vast region of mangrove-lined creeks, where many armed groups have links to corrupt politicians and syndicates that steal oil from pipelines.

The Tora manifold, in a remote area of the delta, is a known location for illegal siphoning of crude oil into barges, Babalola added.

(Reporting by Tom Ashby; editing by Andrew Dobbie)