The decision by stakeholders, including the International Oil Companies (IOCs), to invest in gas-to-power projects will boost the country’s electricity generation and improve the economy, reports AKINOLA AJIBADE.
THE plan by International Oil Companies (IOCs) and their local counterparts to execute gas and power projects will boost the gas programmes of the Federal Government.
Recently, oil majors, including Shell, ExxonMobil and Agip, lined up programmes to boost electricity production.
These programmes are expected to improve generation from less than 5,000 megawatts (Mw) of electricity to more than 10,000Mw in the next few years.
The indigenous operators such as Nestoil Group, and Arnergy Limited are not left out as they are set to invest in the sector.
Besides, the resolve by the Nigerian National Petroleum Corporation (NNPC) to build generation plants across the country will also step up power supply.
last July, the Federal Government struck a six-year deal with Siemens, the German energy giant, to provide 25,000Mw by 2025. Siemens is expected to provide electricity in three phases: 7,000 Mw, 11,000 and 7,000Mw – and may spend $1.35 trillion.
These plans by IOCs and indigenous operators are, however, subject to government’s policies.
Power, gas initiatives
Oil majors, especially Royal Dutch Company Shell, ExxonMobil and Agip, among others, are interested in deepening the power and the energy sectors.
Shell Petroleum Development Company Limited (SPDC), which operates a Joint Venture with the NNPC, Total Exploration and Production Nigeria Limited (TEPNG) and Agip, is targeting 2,400 Mw from Assah North/ Ohaji South gas project in Imo State.
The project, which would offer 600 million standard cubic feet of gas per day, an energy equivalent of 2,400 Mw, would provide uninterrupted power to 2.4 million homes on completion. Also, the firm is generating 650Mw from Afam V1 plant in Rivers State, a development, which made it one of the largest contributors to the power production.
On the domestic scene, the NNPC is working to provide 4,600Mw in Abuja, Kano and Kaduna. The issue has resulted in the approval of Ajaokuta-Abuja- Kano-Kaduna (AKK) gas pipeline projects by the Federal Government as well as ensuring that the government seeks for external funds to make the initiative a reality.
Coupled with this is the decision by Nestoil Group to provide 1,500Mw. The project, which is being built in Okija, Anambra State, is expected to improve supply of electricity in states in the south-east region, among others.
Being implemented by Century Power Limited, a subsidiary of Nestoil Group, the initiative is not without challenges such as government’s policies and bad economic environment, which have stalled investment opportunities.
Arnergy is another indigenous firm that is planning to invest N3.24 billion in the sector to help tackle issues relating to grid electricity in Nigeria.
Operators’ opinions
The Country’s Chair, Shell Companies in Nigeria and the Managing Director, SPDC, Mr. Osagie Okunbor, said 300million standard cubic feet of gas per day (scfd) would be processed at a new gas processing plant owned by SPDC while the remaining 300million scfd would go to a proposed gas processing plant that is owned by Seplat Petroleum Development Company Plc.
He said the project would be a game-changer in the quest for energy sufficiency and growth as the country looks to grow the domestic market.
Also, the Group Managing Director, NNPC, Mallam Mele Kyari, said the plans by the corporation to build 1,350Mw of power in Abuja would help in improving supply of electricity in the area.
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He said: “As a state-owned company and an enabler organisation, we know that our 1350 Mw project in Abuja would impact positively on the nation’s economy.”
According to him, efforts were ongoing to complete the various projects that are being undertaken by NNPC to bolster the growth of the economy.
The Managing Director, Century Power Limited, Dr Chukwueloka Umeh, was also optimistic that Nigeria would be free from electricity problems soon. He said the 1,500Mw plant in Anambra State on completion will help in ameliorating the problems faced by Nigerians.
He said nuclear energy, which Nigeria is planning to go into would do more harm than good, adding that the technology that is used in generating nuclear electricity is sensitive and destructive.
The technology, Umeh said, if not well managed, can destroy a sizeable portion of a state at a goal.
He urged the government to deepen activities in the gas market, stressing that attempts to do so would bring more players into the electricity sector.
Stakeholders’ views
The Director, Centre for Energy Studies, University of Port Harcourt, Prof Wunmi Iledare, said the decision by IOC’s and others to build power and energy processing plants is capable of bringing growth to the economy.
Similarly, the Chief Executive Officer, Change Partners International, Mr. Akachukwu Okafor, said the generation of more megawatts, by IOC’s is good if it is well articulated.
The idea, he said, would help in checking the excesses of pipeline vandals because IOC’s and other owners of pipelines would be able to be monitoring their projects.
He said beyond poor generation, the sector is facing problems in areas such as distribution, transmission, regulatory mechanisms, metering, energy theft and poor revenue caused by low level of collection of bills.
These challenges, Okafor said, should be addressed by the government if the sector would record growth.“Solving these problems would help in galvanising the growth of the electricity sector,” he added.
Also, the Managing Director, PowerCam Nigeria Limited, Mr. Biodun Ogunleye, urged the government to encourage any effort that would add to the generation. He said the IOCs would resolve issues, which border on feedstock such as gas used for electricity generation.
“Multinational oil companies would help in resolving problems relating to supply of feedstock in the sector better. The reason is because they play in the international gas market, a development, which enables what the market requires at any point in time,” he added.
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