As the country continues to grapple with power supply challenge, which has been blamed on gas-to-power constraints, JULIET ALOHAN, examines whether the issue of gas is actually an insurmountable challenge or a result of government’s negligence to put necessary measures in place.
Various power supply targets set by the federal government over time have failed to become reality and most times the failure blamed on gas supply constraints. This has left many frustrated Nigerians wonder whether the issue of gas to power is a rocket science which has no known expertise to tackle thereby defying best efforts.
With the launch of the National Integrated Power Projects (NIPPs) targeted to complement the existing power plants in the country and significantly boost power supply, Nigerians were optimistic that epileptic power supply would soon be a thing of the past. However, this dream is yet to be realised.
The fact that Nigeria prides herself as a leading nation in gas potentials with a proven reserve of 187 trillion cubic feet, has left many perplexed as to why gas to power could be a challenge in a country where gas is flared daily.
However, putting to rest the debate as to whether or not gas to power supply is rocket science, minister of petroleum resources, Mrs. Diezani Alison-Madueke, recently in a press briefing in Abuja, disclosed that the reason why gas to power has remained a challenge, was because ‘’there had been no alignment between the planned National Integrated Power Projects (NIPPs) and the necessary gas supply to them,’’ bringing to rest the mystery of why gas to power has remained a challenge. It is clearly a result of failure to make necessary plans for the future.
‘’Today, the challenge of gas supply is essentially localised around the western axis, as we currently have a situation of excess gas availability in the Eastern axis. As we speak, there is over 300mmcf/d (equivalent to about 1000MW) worth of gas available in the eastern axis but currently not utilised. This is due mainly to the aforementioned misalignment and also to the underperformance of existing PHCN power plants,’’ the minister disclosed.
Minister of power, Prof. Barth Nnaji, had decried that of the expected 10,800mmscf volume of gas supply to power plants in the first quarter of 2012 only 2,268MMscf was supplied resulting in the shutting down of 977.5mw at the plants.
According to the supply breakdown made available to LEADERSHIP, of the expected 3,720mmscf of gas expected in January, only 975mmscf was supplied, while 693mmscf and 600mmscf was supplied in February and March respectively as against the required 3,360mmscf and 3,720mmscf respectively.
The supply shortage, it was learnt resulted in the constraint of 337.5MW at the Olorunsogo NIPP, while 152MW was constrained at Olorunsogo PHCN, even as 112MW and 276MW was shut-in at the Sapele NIPP and Geregu PHCN plant respectively.
Same fate also befell the Ughelli power plant where 100MW of power was shut-in due to inadequate supply of gas, resulting in erratic and poor quality power supply.
Findings has further shown that plans by the federal government to add an additional 10,000MW of electricity to the national grid by 2014 with the implementation of the National Integrated Power Projects (NIPPs) might be far from been achieved if nothing is done now to address gas supply constraints.
Managing Director of the Niger Delta Power Holding Company (NDPHC) owners of the NIPPs, Mr. James Olotu, while disclosing that about $5.75 billion has been expended on the project since inception, said its delivery by Q1 of 2014 was on course but doubted that it would significant contribution to the grid if gas constraints issues was not addressed.
Against revelations by the petroleum minister that there had been no gas supply arrangement to the projects since inception in 2005, one cannot but wonder whether the project which Olotu said could achieve 4,770MW by December 2012 and 10,000MW by 2014 if there is adequate gas supply, was programmed to yield no result.
Despite the abundant gas resources which the country is blessed with, it sounds unbelievable that power plants are hindered from running at full capacity due to gas constraints, whereas gas is been flared across the country daily.
Olotu informed that power plants were strategically located around gas flare site with a view to converting the flared gas to power the stations, but this is yet to be as gas flaring still thrives and power plants have no gas to fuel them.
For instance, Olorunshogo power plant with an installed capacity of 676MW, it was learnt, occasionally runs on one or two units of 112.2MW each, out of the commissioned 451MW subject to availability of gas.
Same fate has befallen the Sapele plant where 225MW has been commissioned out of the total installed capacity of 451MW, but occasionally operates only one unit of 112.5MW due to the same reason.
The case of the Calabar power plant, a 563MW facility is even worse. There would be no available gas for the plant to run, after the commissioning of two of its turbines by August and October 2012 respectively, because the earliest gas delivery from Addax to the plant is expected by 2014. However, an alternative gas supply arrangement at high cost is expected from Seven Energy later in the year.
The Omotosho power plant, a 451MW facility, it was gathered that there is yet no approved date for tie-in to existing gas line being arranged with the Nigeria Gas Company even though the plant has reached first fire five months ahead of schedule.
What is more worrisome is that in some cases where gas supply is not an issue, power evacuation is a challenge. For example, while the Alaoji power plant, a 961MW facility, has no gas supply challenge, evacuation capacity is only limited to 150MW.
This is even as it was learnt that the Ihovbor power plant, a 451MW facility, where all four units would be ready between April and Oct 2012, is also faced with evacuation challenge. This means that the power produced at the plant would be shut-in, in the meantime, with hopes of evacuation capacity later in the year.
The Minister of Power at various fora, has noted that gas was the impediment to power generation targets, maintaining that if the challenge is overcome, power would be delivered to Nigerians.
Experts have however, accused the federal government of not being proactive, noting that government was aware that it takes time to develop wells and build the infrastructure, yet concrete plans were not being made in that direction over the years.
But following the declaration of an emergency plan to address the challenge of gas supply to power generation, the petroleum minister has said that the development of the East-west pipeline was being accelerated with the intension to leverage the gas in the West.
She informed that a total of 800mmcf/d of gas is being produced in the Western axis of which 520mmcf/d is deployed to the power sector (equivalent to about 1800MW on average). The balance, she said is supplied to domestic manufacturing industries such as the cement plants and the West African Gas Pipeline.
However, due to the situation on hand, she said over the next 12 months, a total of 500mmcf/d, would be added to the national grid. This she noted would have direct impact on the overall power situation in the country.
‘’Specifically, about 180mmmcf/d (about 700MW) of the additional 500mmcf/d is due within a few weeks, by June. This will come from Escravos, Utorogo, Uhgelli and Oredo. Ongoing activities such as the laying of the Olorunshogo pipeline, the completion of the ELPS A pipeline and the completion of the NIPP pipeline around Oredo are key elements of this addition,’’ Alison-Madueke informed.
She said the addition will help address the immediately identified shortfall in supply to Sapele, Geregu and Olorunshogo power plants, adding that ‘’these short term additions will result in almost 90 per cent of the current outstanding shortfall to power, being addressed.’’
As a further intervention move, the minister informed that she has directed the ELPS phase 2 contractors to deploy additional resources to accelerate the expansion of the pipeline from Oben to Lagos, noting that this would enable expanded gas supply into the grid through the 12 month period, while for all the new projects, she said: ‘’I have directed the deployment of a pragmatic contracting strategy to enable expedited procurement of critical items such as the line pipes and related accessories.’’
To further accelerate the process government has said it was committed to final investment decisions (FID) in major new projects while all other enablers such as lease renewals would be addressed.
This is even as the minister noted that appropriate steps were being taken by the power ministry to address all outstanding debts and commit to payment for future gas supply as well as other terms stipulated in the gas supply agreements.
Government has also admitted that funding for these projects are enormous and according to the petroleum minister plans are on to source funding through the public/private funding initiative.
While these strategies are said to be worked out, all Nigerians can do is wait as only time will tell of the present administration’s sincerity to address the age long rot in the power sector.