A Review of the Nigerian Energy Industry

Experts task FG on gas supply for power

Gas-line29 October 2013, Lagos – The Federal Government has been advised to ensure adequate gas supply to all the power plants to achieve stable power supply across the country.

Energy experts, who spoke exclusively to Vanguard, said that inadequate gas supply posed serious threats to the new National Integrated Power Projects (NIPPs).

Managing Director, Seacorf Engineering Limited, Mr. Charles Fashola, cited inadequate gas supply to power stations as one of the major challenges facing the power sector.

He also said that the issue of inappropriate commercial pricing had deterred gas producers from investing in the country.

Fashola noted that while the nation was experiencing acute power shortage, some projects are ready but could not come on stream due to inadequate gas supply. He identified projects such as the 500MW Olorunsogo Phase 11, 450MW Sapele, and the 561MW Calabar plants which are ready, but have no gas fuel their operations.

According to him, some other projects which have been commissioned are still facing the challenge of gas supply. He therefore urged the Federal Government to parley with gas producers in order to realise the objective of the gas master plan.

“Government should intervene by ensuring adequate gas supply to all power stations and the newly-inaugurated NIPP projects. There is the need for government to sanction all contractors or companies saddled with the responsibility of supplying gas to IPP stations, but failed,” he said.

An energy consultant, Mr Danladi Bako, traced another hurdle against the realisation of stable power supply to obsolete transmission and distribution systems.

Bako, who is the Managing Director, Slogen Engineering Limited, said that there should be efficiency in the management of the power sector to achieve relative stability in power supply.

“The commissioning of the two power plants – Omotosho and Geregu power plants with a combined power generation capacity of 934 megawatts is expected to contribute significantly to the improvement of power supply. The issue of gas supply to these plants should be resolved quickly to enable them function optimally,” he said.

Also speaking, a consultant in energy law, Mr Lawal Sodiq, said that the persistent power problem was due to the inability of past administrations to integrate electricity generation and distribution into the nation’s development plans.

“One prominent measure of development is per capita consumption of electricity. Past administrations did not realise that we are supposed to be and we are in fact, one of the fastest developing economies in the world,” he said.

Many of the power stations were built without taking cognizance of how gas would be sourced to make them operational.

Recall that in 2011, the Nigerian National Petroleum Corporation (NNPC), signed an agreement with Anglo-Dutch Shell and Chevron Corporation for the supply of natural gas to the country’s power stations.

The agreement, which covered the supply of more than 70 per cent of the total gas requirements to the domestic power industry, was to serve as a framework for future agreements, according to the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke.

Also, at the June ministerial briefing, the minister said that the contract for the vital 120 kilometre East-West gas pipeline, crossing the River Niger, has been awarded and is progressing with a target completion time of 2015.

According to her, when completed, evolving shortfalls in gas supply to power in the Western area will be adequately and permanently mitigated with excess flows from the East via this critical pipeline.

She further said that a final element of the infrastructure expansion is the Calabar-Ajaokuta-Abuja-Kano pipeline. “This is now the focus of attention. Major engineering review of the 1000 kilometre pipeline has now been concluded and plans are under way to jumpstart this pipeline by the end of the year/early 2014, opening up gas access to the East and Northern part of Nigeria.

“Over $600m is expected to be deployed from Eurobonds being issued by the Ministry of Finance to jumpstart this pipeline by year end. By end of 2015, gas access to Abuja should have been established and Kaduna/Kano thereafter, opening up the Northern half of the nation for industrial revitalisation,” she said

– Vanguard

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