Port Harcourt — There are indications that the country’s economy and the entire Nigeria’s energy market have lost over N253,665,783,806 revenue, due to the over three weeks rift between Ibom Power Company Limited, IPC and its host community.
Ibom Power Plant, owned by the Akwa Ibom State Government is a 191MW gas fired power generating plant, geographically located along the Atlantic Ocean basin, beside the Imo River in Ikpa-Ibekwe town, Ikot Abasi Local Government Area of Akwa Ibom State.
Speaking on the economic lost orchestrated by the continuous closure of the power plant as a result of the ongoing protest by the host community against the firm, a Chartered Economist, Mr Friday Nathaniel Udoh, said an investment of N513billion is also threatened by the shutdown.
Udoh who is also the coordinator of Institute of Chartered Economists of Nigeria, South-South, explained that at the current electricity price of N31.58 per kilowatt, plus 7.5percent VAT, IPC has lost over N3.3billion in the last 24days.
He further disclosed that oil firms such as Savannah Petroleum and Frontier Energy Limited, which supply over 45MMscf/d of gas to IPC, have lost over N979million at the prevailing gas price of $2.5, in the last 24days as a result of shut in.
“Computing the cost of IPC supply disruption due to shut-down, across the classes of consumers namely, residential, small, large commercials and industrials consumers for 24consecutive days has the cost at N249,011,096,250.
“Equally, the most affected assets over the rift, includes the captive 191MW power plant, consisting two 38MW GE frames, along with on2 115MW GE 9E gas generator, the turbines and electricity generation equipment cost is estimated above N150,075,000,000.
“The lost 200mscf/d processing plant and the 62kilometer pipeline operated by Seven Uquo Gas Limited, which supplies gas to IPC, is put at N217,500,000,000 and N145,000,000,000 respectively; this is not including the investment on a 132KV transmission line evacuating power from the plant to Eket Sub-Station.
“To the same degree, the hi-cuff has occasioned on the relapsed on investment rate of return for the assets, at investors peril, similarly threatening the future investment into the country.”
Udoh said indicators confirm that electricity consumers incur substantial economic costs due to supply outage, going by the economic concept establishing economic cost of an outage.
“Correspondently, the plant has along term purchase contract with Savannah Petroleum, a new majority stakeholder through acquisition of Seven Energy by the former, for supply of 45million standard cubic feet of gas per day.
“For 24 days since the plant was shutdown. The shut-in gas cost (between January 13 till February 5, 2020) at N979,406,250 per day. Hence, the operator, its Joint Venture partners, Savannah Petroleum losses N979.41million in revenue.
“At N31.58 delivery cost per kilowatt electricity to consumers. For a 191MW generating capacity of Ibom Power Plant, the economic cost/loss across the electricity business chain alone, along with 7.5percent Valued Added Tax for 24 days is N3.3billion.”