A Review of the Nigerian Energy Industry

WAGP: Nigeria remains committed to supplying gas to neighbours – NNPC

Oscarline Onwuemenyi 03 January 2015, Sweetcrude, Abuja – The Federal Government has insisted that it remains committed to fulfilling it’s obligations towards supplying adequate gas to neighbouring countries as prescribed in the West African Gas Pipeline project.
WAGPCoxMeanwhile, the Ghanaian government is set to demand an additional $30 million dollars as fine from the Nigerian government for failure to supply gas to the country as indicated in the contract.
Last month, Ghana’s President, John Mahama disclosed that Nigeria had to pay Ghana the amount of $10 million in penalties for failing to deliver the quantity of gas spelt out under the West African Gas Pipeline project.
Nigeria’s failure to provide enough of gas in accordance with the contract has led to the power plants that rely on gas from the West Africa Gas Pipeline to be been shut down, according to reports.
The Nigerian National Petroleum Corporation (NNPC) has blamed the inability of the country to meet up with its contractual supply of gas to its West Africa neigbour to incessant shut down of key gas facilities within the country as a result of vandalism.
The Group Executive Director, Gas and Power of the NNPC, Dr. David Ige noted that installations such as the Trans-Forcados, which has suffered three attacks this year, occurring within a space of 17 days, are mounting pressure on local supply of gas.
“This phenomenon has continued to make the fulfillment of obligations to the Benin Republic, Togo and Ghana in the contractual agreement to be more difficult,” Ige said.
Ige, however, insisted that many of the disruptions in gas supply to Ghana and other West Africa countries are being addressed. “Where net shortages existed as in 2013, these were remedied according to terms of the agreement through penalty payment of $10 million,” he said.
He added that, “Nigerian suppliers (NNPC, Chevron and NPDC) have a contractual obligation to supply about 130mmcf/d of gas to customers across West Africa. This transaction is governed by a supply agreement, which recognises various operational and commercial situations. Since 2013, there have been some unfortunate supply disruptions affecting gas shipped through the West African Gas Pipeline.
“These have been largely due to Force Majeure events like the outage of the Escravos- Lagos pipeline and other secondary pipelines such as the Trans-Forcados pipeline.”
Stating that many of the disruptions have been addressed, the NNPC GED maintained that where net shortages existed as in 2013, these were remedied according to terms of the agreement through penalty payment of $10 million.
According to him, Nigeria “remains committed to supplying the West African region. The current supply challenge is being addressed aggressively and full contractual supply should be attained within a few months.
“In addition, new independent suppliers are also looking to develop supplies to WAGP beyond the base volume. The medium term projection is very positive.”
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