11 March 2014, Lagos – Nigerians will have to grapple with epileptic power situation over the next couple of months, as the country is projected to lose about 3,733 megawatts of electricity between March and June 2014.
This, according to a document obtained from the Presidential Task Force on Power, PTFP, will be as a result of constraints in gas production, supply and inadequate power evacuation facilities, arising from frequent disruptions and tampering of crude lines, which negatively affect gas production and condensate evacuation.
The Chairman, PTFP, Mr. Reynolds Dagogo-Jack, in the document titled, ‘Maintaining service delivery & the early stabilisation of the infant privatised Nigerian electricity supply market,” disclosed that only 3,231MW of electricity will be effectively distributed in May, while 3,420MW is to be distributed in June.
Stranded generation for the months of March and June 2014, he noted, will be 1,512MW and 2,221MW respectively.
Stranded generation is when electricity power is available at the power plants, but cannot be evacuated to the end users.
Dagogo-Jack disclosed that between May and November 2013, the country witnessed 12 major attacks on five critical gas pipelines in the country, leading to an average capacity loss of about 1,880MW of electricity.
Two major incidents, according to him, are the closure of the Trans Niger Pipeline by Shell Petroleum Development Company, which led to the loss of about 650MW from the Afam Power Plant, and the November 23 shut down of gas supply to Okpai by the Nigerian Agip Oil Company, which led to a loss of 480MW.
He gave a breakdown on the impact of gas constraints on stranded generation, saying as at December 2013, thermal deliverable power was 4,181MW with effective gas power capacity at 2,848, while the country lost 1,333 MW.
Dagogo-Jack also made the following projections for stranded generation:
•September – 1,473MW;
•December – 1,286 MW;
•March 2015 – 1,216 MW;
•June 2015 – 1,286MW;
•September 2015 – 1,225 MW; and,
•December 2015 – 1,416 MW
He said, “Over the next two years, the increase in thermal generation capacity is expected to come from NIPP turbines, capacity recovery of former Power Holding Company of Nigeria, PHCN GenCos and from additions to currently in-situ Independent Power Plants, IPPs. All these parties will be competing with each other for the limited supply of available gas.”
In order to minimise the challenges, Dagogo-Jack advocated a “timely completion of the Obiafu/Obrikom-Oben (Ob3) infrastructure project to link the surplus Eastern network to the deficit Western networks.”
“Industry commitment to a date for full migration from ‘best endeavor’ to fully-contracted gas supply and transportation agreement between trading entities and a review of the current commercial framework for gas trading.”
He also urged that the Nigerian Gas Company, NGC, should be restructured as a stand-alone commercial firm, while government control in the firm should be removed.
Continuing, he said, “Gas adequacy and pipeline vandalism currently constitute the greatest risk to service delivery & market sustainability. The continued delay in migrating to a fully -contracted gas market regime remains a major impediment to incentivising both upstream investment decisions and the maintenance of existing assets.
“Correct pricing to match international benchmarks is key to mobilising new investments. The Emergency Domestic Gas Committee inaugurated in June 2012, as an inter-ministerial initiative led by the Ministry of Petroleum Resources, MOPR, worked aggressively to identify gas projects and secure the commitment of the project owners to drive them .
“As we speak, it has not met for months and the projects under its watch have mostly slipped past several times past scheduled dates. It should be re-energised.
“Going forward the NPDC’s effective delivery of its gas projects shall become increasingly critical to meeting the domestic gas demand since they are inheriting many of the JV gas assets previously operated by SPDC .
“The completion of the OB3 East-West link – line is critical to supply optimisation from 2017.”
– Michael Eboh, Vanguard