Power sector loss rises by 13% in 1week as inadequate gas persists

Power sector loss rises by 13% in 1week as inadequate gas persists

 

The nation’s power sector lost a total of N10.7 billion in the first week of July 2018, showing an increase of 13 per cent compared with N9.3 billion recorded in the last week of June 2018.

A report obtained from the office of the Vice President Yemi Osinbajo, attributed the development to insufficient gas supply as well as poor distribution and transmission infrastructure.

According to the report: ‘’On July 11, 2018, average power sent out was 3,935MWh/hour (up by 111.85MWh/h from the previous day). 2, 046.3MW was not generated due to non availability of gas. ‘’115MW was not generated due to unavailability of transmission infrastructure, while 883.1MW was not generated due to high frequency resulting from unavailability of distribution infrastructure. 240MW was recorded as losses due to water management.

‘’The power sector lost an estimated N1, 577, 000, 000 (One billion five hundred and seventy seven million naira) on July 11, 2018 due to insufficient gas supply, distribution infrastructure and transmission infrastructure.

‘’The dominant constraint on July 11, 2018 remained unavailability of gas – constraining a total of 2,046.3MW from being available on the grid. Peak Generation for July 11, 2018 stood at  5, 004MW.’’

The report further noted that: ‘‘Peak Generation to date – 5, 222MW (December 18, 2017). Estimated Amount Lost to Insufficient Gas Supply, Distribution, Transmission & Water Reserves to date in 2018 – N254, 690, 000, 000 (Two hundred and fifty four billion six hundred and ninety million naira only).’’ This has consequently affected the supply of electricity to individuals, households and organisations nationwide.

NNPC’s promise Meanwhile, the Group Managing Director, Maikanti Baru said: “Within the next three (3) years, with our Joint Venture partners, we are committed to increasing natural gas availability from the current 1.5bscf/d to about 5bscf/d in 2020. Consequently, the government will supply enough gas to generate up to 15GW of electricity to the power sector by 2020 and stimulate gas-based industrialisation.

“In terms of gas production, the domestic demand for gas in Nigeria is unprecedented, with a current daily realistic gas demand of 4,000mmscfd which is expected to grow exponentially to about 7,500mmscfd in the next 5 years.

“We would continue to progress with our Seven (7) Critical Gas Development Projects (7CGDP) which has also been established to deliver about 3.5bscfd of gas to the domestic market by 2020 which is expected to support power aspirations and boost the economy.

“Recently, we sanctioned the $2.8billion, 614Km Ajaokuta-Kaduna-Kano (AKK) pipeline project as a demonstration of our commitment which anchors on developing structured gas architecture across the length and breadth of Nigeria.”

This trajectory will continue to be our priority in the medium to long term. “Aside infrastructure, the continued implementation of the Gas Master Plan remains a core focus of the NNPC. Gas pricing has been adjusted to export parity, legacy debt owed by the various sectors to gas suppliers are being paid through an intervention fund arranged by the Central Bank of Nigeria (CBN). “Gas supply agreements will continue to be made effective with terms that assure bankability to provide the relevant comfort to the producers.  The World Bank’s Partial Risk Guarantee (PRG), will be sustained to provide securitisation of gas revenues. These interventions are boosting confidence in the gas sector.”

NNPC signs $3.7bn agreement on gas devt NNPC has signed an agreement with Shell Petroleum Development Company, SPDC, Seplat Petroleum Development Company Plc, Oando Plc and other partners on the implementation of seven critical gas development projects worth $3.7 billion to bridge the gas supply shortfall in the domestic market.

Baru, identified the five projects by the NNPC joint ventures and two projects by the Nigerian Petroleum Development Corporation, NPDC, a subsidiary of the corporation, as the seven projects.

According to him, some of the projects include, full utilisation of Uquo Gas Plant to deliver 200 million standard cubic feet of gas per day (mmscfd), through the NPDC’s Utapate gas in Oil Mining Lease (OML) 13; and the joint development of OML 24, a joint venture between the NNPC and Newcross and OML 55, a JV between the corporation and Belema Oil.

The other projects are the full utilisation of Seplat Petroleum Development Company Plc’s Oben Gas Plant to deliver 465mmscfd of gas; and the full utilisation of Pan Ocean’s Ovade Gas Plant to deliver 130mmscfd.

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