A Review of the Nigerian Energy Industry

Nigeria deploys measures to boost gas supply for power

Oscarline Onwuemenyi

24 April, 2012, Sweetcrude, ABUJA – The Federal Government on Monday announced a series of emergency interventions to address the challenge of gas supply to power plants across the country, in its bid to ensure an efficient power generation and supply system.

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who made the announcements at a briefing with the media in Abuja, stated that the short-term interventions will result in almost 90 percent of the outstanding shortfall to power being addressed over the next 12 months.

She noted that since 2005, when the National Integrated Power Projects (NIPP) projects were kicked off, there had been no alignment between the planned NIPPs and the necessary gas supply to power them.

“Today, the challenge of gas supply is essentially localized around the Western axis, as we currently have a situation of excess gas availability in the Eastern axis. As we speak, there is over 300mmcf/d (equivalent of about 1000 mega watts) worth of gas available in the Eastern axis but currently not utilized.

“This is due mainly to the aforementioned misalignment and also the underperformance of existing PHCN power plants. As we develop the East-West pipeline, we will be able to leverage this gas in the West,” she stated.

The Minister pointed out that in total, 800mmcf/d of gas is being produced in the Western axis of which 520mmcf/ is deployed tot eh power sector (an equivalent of about 1800MW on average). The balance is supplied to domestic manufacturing industries such as the cement plants, etc, and the West African Gas Pipeline project.

She said, “In total, over the next 12 months, we will be adding 500mmcf/d (equivalent to 2000MW) to the grid. This will have a direct major impact on the overall power situation in the country.

“Specifically, about 180mmcf/d (about 700MW) of this additional 500mmcf/d is due within a few weeks, by June 2012. This will come from Escravos, Utorogu, Ughelli and Oredo. Ongoing activities such as laying of the Olorunsogo pipeline, the completion of the ELPS A pipeline and the completion of the NIPP pipeline around Oredo are key elements of this addition.”

According to her, these projects are all in very advanced stages and should be completed within the timeframe, adding that with the addition, the immediately identified shortfall in supply to Sapele, Geregu and Olorunsogo power plants will be addressed.

She added that, “Beyond the immediate timeframe, the balance of about 320mmcf/d (about 1300MW) will be delivered through the next 12 months. New power plants are continually coming on stream, therefore, in addition to the 180mmcf/d, a further 320mmcf/d will be delivered and deployed to these plants over the next 12 months.”

She said to achieve the 320mmcf/d, a few critical projects will be deployed by the intervention team, including leveraging the excess processing capacity in PanOcean to process gas that will be re-routed from Oredo by NPDC, as well as accessing additional gas at Escravos and major expansion of the Utorogu hub.

“These are the projects that will collectively add 320mmcf/d (1300MW) over the 12-month period. I am confident that the steps we are taking will have a visible impact on gas sustainability and supply, and therefore will positively impact on the power aspiration of the nation,” Alison-Madueke noted.

The Minister further stressed that the government had directed the deployment of a pragmatic contracting strategy to enable expedited procurement of critical items such as the line pipes and related accessories.

“These interventions will require additional funding which is being sourced through governemnt’s public-private funding initiative, she added.

Alison-Madueke said appropriate steps are being taken by the Power sector to address all outstanding debts and commit to payment for future gas supply as well as other terms stipulated in the gas supply agreements (GSA).

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