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Electricity:Gas shortage threatens NIPP plants
Nigerians may continue to live with erratic power supply as the National Integrated Power Projects is not providing the expected relief due to gas supply problems, STANLEY OPARA writes.
The fragile electricity supply situation may get worse in the days to come following a forecast by the Niger Delta Power Holding Company Limited that gas supply challenges will continue to hamper the performance of some completed National Integrated Power Project plants in the country.
For April, the Olorunsogo II and Sapele power plants are expected to function at 60 per cent and 33.4 per cent of their total installed capacities respectively.
Olorunsogo II is currently generating 338 megawatts as against the 563MW installed capacity, while Sapele is doing 113MW as against its 338MW capacity.
In another indication that electricity consumers are in for a hard time, the NDPHC says all the NIPP plants in the country are expected to supply just 788MW to the national grid instead of their combined total generation capacity of 1,238MW during the month.
Speaking on the situation at the Olorunsogo plant, the Managing Director/Chief Executive Officer, NDPHC, Mr. James Olotu, said, “Output is limited by gas. There is no Power Purchase Agreement in place, but payments made by the Power Holding Company of Nigeria and the Transmission Company of Nigeria. Interim Nigeria Gas Company’s gas suspension absorber is in place and there is no securitisation for Chevron GSA.”
For Sapele power plant, there is an interim Gat Supply Agreement in place, but there is no securitisation for Shell’s GSA.
According to NDPHC boss, the Alaoji power plant’s evacuation is limited to 150MW with interim NGC GSA in place. “But it has no securitisation for Shell 40mmscf/d GSA,” he pointed out.
Our correspondent also learnt that the Ihovbor and Egbema power plants currently have no power evacuation capacity.
For the Calabar power plant, Olotu said, “There is no gas and the earliest gas delivery date from Addax is 2014.
“Alternative gas at high cost will be ready later in the year from Seven Energy, and power evacuation capacity is expected to be ready in the middle of the year.”
The Gbarain power plant, according to the NDPHC boss, has its evacuation capacity available with gas from Shell, but is being hampered by community related problems.
For Omotosho II, our correspondent learnt that there was no approved date for its tie-in to the existing line of the NGC.
Olotu said some of the issues and challenges facing the NIPPs were avoidable delays by the government.
According to him, the suspension of funding of the NIPP as a result of the probe by the House of Representatives caused huge variation in costs of the projects as well as demurrage costs, increase in compensation costs for acquired land and Right of Way.
Delays in obtaining approvals, he noted, had resulted in the inability to secure customs duty waivers, which had made the projects to incur significant demurrage obligations.
As lack of gas for completed projects continue to frustrate power generation, the NDPHC boss said, “As at today, four generation transformers are ready at Olorunsogo and two at Sapele, but each station manages to run on the average of one unit a day, that is 225MW instead of 676 MW for the two stations.
Olotu said, “Ihovbor, four generation transformers; Calabar, five; and Omotosho, four, will soon be ready. The last two cannot run because of delayed gas supply.
“Securitisation request from government is being awaited to progress discussions with International Oil Companies on gas agreements. There is no approved date for gas tie-in to the existing line at Omotosho II and this may delay the inauguration of four GTs.”
Despite the announcement that the Kainji Power Station had resumed operations after it was shut down two weeks ago, electricity generation has dropped by over 900 MW in the past one week.
About two weeks ago, the Minister of Power, Prof. Bart Nnaji, had confirmed to our correspondent that electricity generation had, indeed, dropped by 900MW due to gas supply challenges.
“Yes, power generation has dropped by about 900MW because of gas supply challenges. We are having serious gas supply challenges,” the minister had said.
Nnaji had given a hint about the gas supply problem while announcing the shutdown of the Kainji Power Station. The station later resumed generation after three days.
The minister had said, “It is regrettable that it (shutdown) occurred when there is a considerable reduction in national power supply as a result of shortage in gas supply to the thermal power stations.”
The minister had also disclosed that President Goodluck Jonathan was personally leading a new effort to draw up a far reaching and composite plan to end all the impediments to the quick realisation of electricity development in Nigeria, including gas supply hitches.
Our correspondent gathered that both the government-owned and privately-owned power stations had been generating about 3,200MW of electricity in recent times as against the over 4,000MW they were earlier generating.
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