03 December 2014, Abuja – THE Federal government has sealed an agreement with some technical partners, preparatory to the commencement of work on a 1, 000 mega watts (MW) power plant in Kastina State.
The project, whose cost was put at $1 billion, is expected to within the next 30 months after construction commencement, supply 300MW of electricity, then a gradual increase to 1,000MW in the long term. It is a project of private investors and the Katsina state government.
The contract for the construction of the 1,000MW Power Plant in Katsina was sealed with Strancton Limited.
Oblivious of the challenges of gas to power in Nigeria, promoters of the project have turned to Niger Republic for gas for the power plant.
Meanwhile, faced with transport for gas for the Kaduna Power Plant, the federal government has engaged a firm to convert natural gas to liquefied Natural Gas and supply to the plant.
To that effect, the Federal Ministry of Power signed a Memorandum of Understanding with Greenville Oil and Gas Limited for the supply of Liquefied Natural Gas (LNG) to the Kaduna Power Plant.
According experts, Natural gas are a major source of energy, but many towns and cities that need the energy are located far from the gas fields. Transporting gas by pipeline can be costly and impractical. Some firms create LNG by cooling the gas to a liquid to -160ºC, which is easier to transport, safely and efficiently.
LNG, on its part, is seen as a clear, colourless, non-toxic liquid that can be transported and stored more easily than natural gas “because it occupies up to 600 times less space.”
Nebo also signed the deal for the supply of LNG to Kaduna Power Plant.
He said the deal had brought to fore new ideas of how to provide cheaper fuelling, noting that “you don’t need to locate a power plant next door to where you have gas. Hence, it is possible to use liquefied natural gas”.
Nebo said “such innovative project is a call for us to take full advantage of gas reserves, by building infrastructure for its utilization, as gas alone can assist the country’s economic development immensely even without oil.
On the planned commencement of work on the Katsina Plant, Nebo promised to support the project, describing it as another way to stabilize the nation’s grid system by making it robust and active.
He urged other States to emulate the Katsina State initiative, by keying into the privatization agenda in the power sector and investing in the sector in partnership with the private sector.
Minister of State, Mohammed Wakil described the signing of the MoUs as proof that the efforts of the Government in wooing investors are yielding positive results.
According to him, the realization of the project would bring Nigeria nearer to the target of 20,000MW by 2020 as contained in the vision 20:20:20 document.
He said the local content component of the two MoUs was commendable, as it would ensure that Nigerian Youths take their rightful positions in the future.
Chief Executive Officer of Strancton Limited, Edozie Njoku, described the Kaduna Plant project as the first gas pipeline – fed electricity project in Northern Nigeria between Katsina State Government and Consortium of General Electric, Vellbridge Oil, Gas and Natural Resources Limited and other private partners.
Njoku said the project would lead to reduced energy costs, industrial development, and creation of skilled jobs, build entrepreneurship and in general, improve quality of life.
Meanwhile, the Operator of the Nigerian Electricity Market (MO) at the Transmission Company of Nigeria (TCN) yesterday conducted a special stakeholders sensation workshop in the Nigerian electricity market in preparation for the anticipated declaration of the Transitional Electricity Market (TEM).
The sensation held in Abuja, had participants from the operators and centred on preparing the sector the soon to be unfolded contract and rules based stage of the electricity sector reforms.
Executive Director, Market Operations at TCN, Mrs. Ngozi Osuhor, who spoke at the event, noted that the conditions precedent for the transitional electricity market had been met awaiting the Minister of Power’s final action (declaration).
She said: “By the rules of the market in the privatised stage, the Market Operator has a role to educate the market. This education of the market is for the operators in the market. So, we have to talk to generation companies, Transmission Company, and the distribution companies. They are basically our customers, as far as the electricity market is concerned.
“So, we bring them together and discuss topical issues, explain things to them, and give them the opportunity to ask questions and clarifications made. Moving forward, we will have a desk for the next two days so that if there are issues that they want discussed, we will handle all. If we don’t do this, there is ignorance and the market would be slowed down. So, we expect them to talk to us at for a like this.
This is an expected condition precedent (CP) on our side. We are supposed to do this at least every quarter. We started the market in November 1, 2014. This is the third one that we are having, and it is the last for the year.”
On TEM and market operations, she noted: “The Transitional Electricity Market is a stage of market that requires a declaration, a statement that must be made by the Minister of Power. Except that statement is made, we cannot enter TEM. What we are doing is preparatory. We are doing pre-transition. We are doing as much as we can to prepare the market, so that when it gets to TEM, it would be a smooth market. Of course, TEM is contract based. There is going to be activation of contracts and everybody is going to work according to contracts. For now, we are not working according to contracts yet. We are in a pre-transition stage. What that means is that a lot of the conditions are supposed are suppressed to be able to manage the market. So, we are not holding people for not dealing as they should.”
She said stakeholders at the meeting were looking at the various instruments in the market.
Her words: “We are looking at the market rules here. We are looking at the grid codes. These are documents that are in the market. We are looking at all of them and making sure everybody understands them correctly. Then of course, we have a settlement platform. We have to make sure that everybody understands the way the bills are prepared and be sure they understand what they should pay and why they should pay such. Issues like that are to be tackled here.
“We have prepared all the conditions precedent for TEM. For instance, we have our settlement platform in place. We have our payment platform in place. These are the roles we are supposed to play, and then the training that we are going through now. One very critical thing that we are working on now is the ability to read the meters from a central point, being able to read the meters from our OCC (operation command centre) which is right there in the TCN building.”