The Nation Newspaper

Category: Energy

  • Power firms worry over N700b loan

    Power distribution companies (DisCos) are worried that the N700 billion Federal Government’s loan may not be enough to take care of their obligations, The Nation has learnt.

    Their fear stems from the  foreign exchange rate, which has increased the cost of production, and the  state of the economy. But they believe the loan would help to reduce their shortfalls, urging the government to extend similar assistance to other operators.

    The Director of Research, Association of Nigerian Electricity Distributors (ANED),  Mr. Sunday Oduntan, said the firms may not be able to  record much growth with the money. Although, it would help in reducing operational losses  it cannot guarantee the firms’ optimum performance, he said.

    He urged the government to provide a lifeline to operators in the upstream, midstream, downstream, and others in the value chain, to develop the oil and gas sector.

    Oduntan said: “The energy distribution companies are happy with the N700 billlion loan. However, the money cannot solve the problems facing the power firms. The DisCos are experiencing dearth of infrastructure caused by lack of liquidity in the industry. There are problems such as weak and obsolete transmission/distribution equipment, shortage of gas, meters, transformers and others.

    “The lull in activities in the petroleum industry is due to low engagements in the exploration and production (E&P) segment of the oil and gas sector. Therefore, extending such lifeline to E&P players will go a long way to boost gas supply to the thermal power plants and electricity supply. That is why the government needs to enhance the growth of the oil and gas industry by giving loans to the operators.”

    Oduntan said the N700 billion facility and the over N1 trillion debts owed the power firms by the Ministries, Departments and Agencies (MDAs) of government are not the same. “The MDAs are yet to pay more than N1 trillion, which they owe the power distribution companies. The debts and the loan are two different issues and should not be construed to mean the same thing. The loan is being given to compensate for debts,” he said.

    He said the decision by ANED and its members to keep silent on the issue of debts should not be mistaken for stupidity, stressing that the idea was to foster peace in the country. According to him, many stakeholders are peddling rumours about the state of the sector, including the debts owed the DisCos, among other issues.

    According to Oduntan, the problems in the sector are enough for the operators to contend with, adding that it would amount to waste of efforts if the operators engage in counter accusations with those accusing them of poor performance.

    The sector is yet to record any meaningful growth since 2013 when it was sold to the investors in the private sector. Instead, the industry has been facing problems such as poor generation, supply of electricity, shortage of meters, huge debts, among others. The sector recorded 2,500 megawatts (Mw) of electricity in the first quarter of 2017, the lowest ever in recent times. To improve power supply, the Federal Government advocated for energy mix, a development, which ensures that the country uses both on-grid and off-grid methods of generating electricity for growth.

  • NIPCO has world-class gas plant, NLNG chief

    NIPCO has world-class gas plant, NLNG chief

    Nigeria Liquefied Natural Gas limited (NLNG) Managing Director,  Mr. Tony Attah, has described NIPCO Liquefied Petroleum Gas (LPG) terminal as a world class facility.

    He described the plant as a game changer in the industry,  adding that it could assist the nation effectively.

    Attah spoke during a facility tour of NIPCO terminal in Lagos. He said the operations and the human capital of the company were worthy of emulation in the quest to deepen LPG access nationwide.

    “I never in my wildest imagination believed that this kind of facility exists in Apapa. The mental picture I have of Apapa is just a congested area, but coming to NIPCO, I can see that beyond the congestion, there is quite a lot of value for Nigeria through the operations of NIPCO Plc,” he said.

    The  NLNG chief noted that NIPCO does not only have an advantage of operating in front of three or four  jetties receiving both white products and gas but also investing heavily to upscale the amount of LPG that it can be received into its facility.

    Attah said: “For me NIPCO is a real game changer and we are committed to continue to support the company and indeed Nigeria to bring about the positive change in terms of energy availability for Nigeria.”

    He noted that there is a big scope for the company to strengthen the handshake, deepen the partnership between NLNG and NIPCO, adding “we stay committed to the partnership and most importantly, we stay committed to Nigeria.”

    Attah restated NLNG’s commitment to Nigeria, stressing that the company’s vision is to be a global player in the LNG market and to help build a better Nigeria, adding that part of it is its direct involvement in the LPG space.

    He said as at 2007, Nigeria was doing only about 50,000 tonnes of LPG before NLNG gom glad to say that as at 2016, NLNG’s LPG contribution to Nigeria was well over 25,000 tonnes with a plan to increase it to 300,000 tonnes this year.

    NIPCO Group Managing Director, Mr. Venkataraman Venkatapathy, confirmed NLNG as the biggest producer of LPG locally and has played commendable role in supplying LPG for domestic consumption.

    He recalled that NIPCO’s entry into the LPG business in 2009 was in apparent response to Federal Government’s call for genuine investors to improve LPG access to Nigerians through provision of infrastructure that could aid supply.

    According to him, the historic completion of the 4,800 MT facilities in 2008 and the unparalleled support of NLNG encouraged NIPCO to commence construction of the largest LPG facility in Africa (5,000MT) in continuous effort to improve access, facilitate gas evacuation across the country and quick turnaround of NLNG vessels.

    He told the visiting NLNG delegation that safety remains the company’s watchword as it has never experienced any lost time injury (LTI) in its operations since 2009.

    Venkatapathy informed the team that NIPCO has excellent relationship with off-takers for obvious reasons including proximity to jetty, enduring LPG business operations, improved loading and weighing facilities to ensure accuracy of product loaded, and faster turnaround, among others. These factors  make NIPCO first choice LPG terminal.

     

  • ‘NLNG Act amendment amounts to double taxation’

    The Nigeria Liquefied Natural Gas Limited (NLNG) General Manager, Production,  Tayo Oginni, has said amending the NLNG Act would lead to double taxation. This is because gas suppliers are already paying NLNG  the Niger Delta Development Commission (NDDC) three per cent levy.

    Oginni, according to the firm’s General Manager, External Relations Division, Kudo Eresia-Eke, spoke  while briefing international media correspondents and the News Agency of Nigeria (NAN) Managing Director, Mr Bayo  Onanuga, when they visited the NLNG plant facility in Bonny, Rivers State.

    The planned amendment, he said,  was inimical to the oil and gas industry, especially when the country should be developing its vast gas resources and attracting foreign direct investments into the country.

    He said after nearly 30 years of attempting to start the LNG project in Nigeria, it was the enactment of the NLNG Act that made it possible for the NLNG to be established. NLNG’s   establishment facilitated the Final Investment  Decisions (FIDs) for the six train, which earned the country the reputation of the first growing NLNG project in the world. The milestone, Oginni said, would be watered down by attempts to change the rules of the game built into the Act.

    Recounting his experience with the NLNG project,  he said the loss of hope experienced prior to the incorporation of the NLNG again manifested in the NLNG’s bid to expand its production facility with Trains 7 and 8 as a result of lack of investment in the upstream sector to guarantee gas supplies.

    He called on the Federal Government to preserve the sanctity of agreement in the NLNG Act and pass the Petroleum Industry Bill to spur exponential growth in the oil and gas industry in the country.

    “The Nigeria LNG Limited (NLNG) Fiscal Incentives, Guarantees and Assurances Act (NLNG Actallowed investments to flow into the country. It provided investors the confidence that any agreement entered into would be respected and preserved. To amend the Act will not help Nigeria, NLNG and its hopes for expansion. It will erode investors’ confidence that the Act provided in the first place,”he said.

    He pointed out that the imminent requirement of over $1 billion investment every year in the upstream for the next few years in order to guarantee steady gas supply to ensure that NLNG’s Trains 1 – 6 can be kept full over the contracted life of the plant, will be impossible with the amendment.

    “It will also mean an immediate loss of foreign investment of US$25 billion in respect of Trains 7 and 8 investment ($15 billion by the upstream and USD$10 billion for construction). This will also cost the Niger Delta region and the country about 18,000 jobs required for the construction activities of the new trains,” he added.

    Commenting on the achievements by the NLNG, the company, he said, generated $90 billion in revenues as at 2015, paid $5.7 billion in taxes as well as committed more than $200 million to corporate social responsibility (CSR) projects in the Niger Delta, especially in capacity building and infrastructure development. He said the  company was to commit some N60 billion to see the Bonny-Bodo road come into reality and commit N3 billion annually for the next 25 years to transform Bonny into another Dubai.

  • BEDC to publish supply schedule

    Benin Electricity Distribution Company (BEDC) Plc is to publish power availability schedule for customers in its franchise areas of Edo and Delta states soon.

    This is coming on the heels of the prevailing electricity generation limitations affecting many Nigerians.

    Its Managing Director/Chief Executive Officer, Mrs. Funke Osibodu, said the power availability schedule became necessary to enable customers predict when electricity would be supplied or interrupted and restored and, thus, enable them plan their activities.

    She said: “It has become necessary to undertake programming for customers of BEDC in order to improve our services to them. They, however, should note that load shedding time may sometimes vary due to changes in generation, technical challenges and other unforeseen events beyond our control. This will first be published for Edo and Delta states and after perfecting this, similar publication will be done for Ondo and Ekiti states.”

    Mrs. Osibodu at a media briefing in Benin, Edo state capital,  said the firm was fine-tuning the schedule, with a view to starting its implementation soon.

    According to her, the load management schedule was prepared based on the roaster submitted by each of the company’s 24 business units, while codes have been assigned to each 11KV feeder emanating from injection substations that feed specific areas in the four states.

    She said in Edo,  for instance, the BEDC was creating conducive environment for companies to grow by balancing the power given to both residential, communities and industrial locations, adding that the idea would enable industrial concerns reduce cost of production, drive economic growth and create jobs for the unemployed youths in the area.

    This, she said, is in addition to the efforts of the firm to subsidise electricity being supplied to customers in the state.

    On Concept Route Marshall, she said the initiative was borne out of the need to enhance customer relations and improve the company’s commercial field operations.

    “A route is defined as collection of customers in certain transformers in some particular route(s) which the assigned officers will be expected to manage and ensure customers on it are properly managed/served.

  • Shell’s FLNG begins journey to Australia

    Royal Dutch Shell’s prelude floating liquefied natural gas (FLNG) facility has left the Samsung Heavy Industries shipyard in Geoje, South Korea to Australia, marking a significant milestone for the project.

    The facility, constructed by Technip Samsung Consortium, is being towed to North West Australia, where the next phase of the project will begin.

    According to Shell, on arrival at the Prelude offshore gas field, 475 kilometres (295 miles) north-north east of Broome, Western Australia, pre-installed mooring chains will be lifted from the seabed and secured to the facility. Once secured, the hook-up and commissioning process will begin.

    Prelude FLNG is an important project in Shell’s portfolio. It will provide liquefied natural gas for customers around the world and generate cash flow that will help drive Shell’s Integrated Gas business performance. The safe and reliable start-up of prelude’s operations will be the project team’s focus throughout the next phase. Cash flow from the project is expected in 2018.

  • More marginal fields set to hit first oil

    It is cheery news that three more marginal fields will hit first oil soon. Century Energy Exploration and Production (E&P) is on course to bring the Atala Marginal Field on stream, while Excel E&P has formally started to inject about 800 barrels of crude oil per day from Eremor field into the Trans Forcados pipeline and sources at Millenium Oil and Gas said it has less than two months to complete all the remaining hook up and commissioning facilities for the startup of the Oza field.

    According to Africa oil+gas Report, the licences for these fields were part of those awarded by the Federal Government in 2003. It said the Atala field is actually held by the Bayelsa Oil and Gas Company, one of the three state companies that won an asset in the 2003 marginal field bid round. Century is only a technical and financing partner, but its economic interest is higher than 50 per cent, it added. The field development project is funded by Eunisell Solutions, a service company which will realise its investment from proceeds of the crude output.

    “What remains are minor permitting issues and installation of sales line metres for evacuation purposes,” said sources close to the Atala field production procedures. Africa oil+gas Report also stated that 2,000 barrels of oil per day (bopd) from two reservoirs will be delivered into barges and ferried into a floating storage and offloading vessel (FSO) for export. The offftaker is Monaco, it said, adding that part of the cash flow from Atala-1 production is expected to fund the drilling of Atala-2.

    “Millenium’s partners on Oza field are Hardy Oil and Emerald Resources. The field’s Early Production Facility (EPF) and tie-in at Shell Petroleum Development Company (SPDC’s) Isimiri flowstation, pipe laying of 27.5km of 3inches inter well flowlines and 3inches and 6inches test and crude delivery pipelines from the Oza manifold to Isimiri flow station are all done. Well test on Oza-2 short and long strings gave results suggesting productions of as high as 1,500bopd to 10,000 bopd. Oza field’s production is the least certain of the three, it added.

  • Nigeria needs $10b yearly to achieve Gas Master Plan’s goals

    To achieve the objectives set out in the Nigerian Gas Master Plan, at least $10 billion yearly investment is required over two to four years period, the President of the Nigerian Gas Association (NGA) Dada Thomas, has said.

    The NGA President, who is also the Managing Director and Chief Executive Officer, Frontier Oil Limited, said such investment would create job opportunities for local line pipe manufacturing plants, construction companies and pipeline operators and an annual income of about $0.75 billion.

    Dada, who was highlighting the potentials of natural gas and the need to support its exploitation in-country, noted that the domestic gas (domgas) market has grown over the years, but only 13 per cent or 1.01 billion cubic feet (bcf) of total gas production of 7.5 bcf per day is consumed locally while 43 per cent is exported via liquefied natural gas (LNG) and West African Gas Pipeline, 34 per cent used for gas injection and 10 per cent flared.

    He said: “The growth in production came about largely by encouragement followed by compulsion. The end result is that Nigeria is only ranked 22nd in production of gas in the world, and we found ourselves in a perfect storm sitting in darkness generating less than five gigawatts (Gw) of grid power while flaring enough gas to generate two to three gigawatts of electricity and power plants are starved of gas. We have only two gas based industries (GBI) and barely any gas transportation infrastructure.

    “The bulk of our domgas is consumed by power plants within an illiquid and poorly regulated gas-to-power value chain that is threatening to cause systemic bankruptcy of all parts of the value chain and possibly the banking sector. We, therefore, have to conclude that we haven’t properly exploited our gas resources for domestic use for the benefit of our nation or our people and those brave enough to invest in our country’s development.

    “Looking to the future, the forecast demand for gas is ambitious with a target of eight bcf/d to 10 bcf/d in the long term, the bulk (about 60 per cent) of which is planned to be used for power generation. Given the relatively poor performance so far in developing the domgas sector over the years, how then do we propose to achieve these ambitious targets given the various impediments and issues that have bedeviled and continue to plague the domestic gas industry?”

    Speaking further on the subject entitled: Domestic gas utilisation in Nigeria : from producers to users, Thomas said no domgas market can exist without the upstream sector consisting of the oil and gas companies that explore, develop and produce the gas from reservoir to the wellhead delivering it to the gas treatment plant inlet gate.

    “These companies have to rise up to the challenge of ramping up domgas production from the current level of 1.01bcf/d to the forecast level of 2.5bcf/d over the next five years. The Independent Petroleum Producers Group (IPPG) estimate that this will require initial investments of $6 billion annually over a period of four years dropping to $3 billion annually thereafter in new gas production, processing and transportation infrastructure. The gas requirement is significant and cannot be realised unless gas resources currently untapped are freed up and made available to those willing to develop them,” he added.

    To him, within the midstream sector, a number of new initiatives based on traditional gas treatment technologies are now being deployed in Nigeria and will help revolutionise the domgas industry. Citing examples, he noted that a 500 million standard cubic feet per day (mmscf/d) compressed natural gas (CNG) industry could sustain a $1billion per annum industry.

    “A 500mmscf/d micro/mini liquefied natural gas (LNG) industry could sustain a $1.6billion per annum industry,” adding that growing liquefied petroleum gas (LPG) consumption from 2kg/capita or 400 metric tonnes per annum to 12kg – 20kg/capita or three to five million metric tonnes per annum, could generate a $10 billion plus industry,” he added.

  • Power firms worry over N700b loan

    Power distribution companies (DisCos) are worried that the N700 billion Federal Government’s loan may not be able to meet their obligations, The Nation has learnt.

    This fear is as a result of the prevailing foreign exchange rate, which has led to rising cost of production and the chaotic state of the nation’s economy. The firms said the loan would help them to reduce their shortfalls, urging the government to offer similar assistance to other operators in the value chain.

    The Association of Nigerian Electricity Distributors (ANED) Director of Research, Mr. Sunday Oduntan, said due to the bad economy, the firms may not be able to  record much growth with the money. He said, though the loan would help in reducing the operational losses of the power firms, it cannot guarantee them optimum production.

    He urged the government to provide lifeline to operators in the upstream, midstream, downstream, and others in the value chain, in order to develop the oil and gas sector.

    Oduntan said: “The energy distribution companies are happy with the N700 billlion loan. However, the money cannot solve the problems facing the power firms. The DisCos are experiencing dearth of infrastructure caused by lack of liquidity in the industry. There are problems such as weak and obsolete transmission/distribution equipment, shortage of gas, meters, transformers and others.

    “The lull in activities in the petroleum industry is due to low engagements in the exploration and production (E&P) segment of the oil and gas sector. Therefore, extending such lifeline to E&P players will go a long way to boost gas supply to the thermal power plants and electricity supply. That is why the government needs to enhance the growth of the oil and gas industry by giving loans to the operators.”

    Oduntan said the N700 billion facilities and the over N1 trillion debts owed the power firms by the Ministries, Departments and Agencies (MDAs) of government are not the same. “The MDAs are yet to pay more than N1 trillion, which they owe the power distribution companies. The debts and the loan are two different issues and should not be construed to mean the same thing. The loan is being given to compensate for debts, he said.

    He said the decision by ANED and its members to keep silent on the issue of debts should not be mistaken for stupidity, stressing that the idea was to foster peace in the country. According to him, many stakeholders are peddling rumours about the state of the sector including the debts owed the DisCos, among other issues.

    Oduntan said the problems in the sector are enough for the operators to contend with, adding that it would amount to waste of efforts if the operators engage in counter accusations with those accusing them of poor operation.

    The sector is yet to record any meaningful growth since 2013 when it was sold to the investors in the private sector. Instead, the industry has been facing problems such as poor generation, supply of electricity, shortage of meters, huge debts, among others. The sector recorded 2,500 megawatts (Mw) of electricity in the first quarter of 2017, the lowest ever in recent times. To improve power supply, the Federal Government advocated for energy mix, a development, which ensures that the country uses both on-grid and off-grid methods of generating electricity for growth.

  • BEDC to publish supply schedule

    Benin Electricity Distribution Company (BEDC) Plc is to publish power availability schedule for customers in its franchise areas of Edo and Delta states soon.

    This is coming on the heels of the prevailing electricity generation limitations, which is affecting many Nigerians.

    Its Managing Director/Chief Executive Officer, Mrs. Funke Osibodu, said the power availability schedule became necessary to enable customers predict when electricity would be supplied or interrupted and restored and, thus, enable them plan their activities around the schedule.

    She said: “It has become necessary to undertake programme for customers of BEDC in order to improve our services to them. They however should note that load shedding time may sometimes vary due to changes in generation, technical challenges and other unforeseen events beyond our control. This will first be published for Edo and Delta states and after perfecting this, similar publication will be done for Ondo and Ekiti states”.

    At a media briefing in Benin, Edo state capital, Mrs. Osibodu said the firm was fine-tuning the schedule, with a view to starting its implementation soon.

    According to her, the load management schedule was prepared based on the roaster submitted by each of the company’s 24 business units, while codes have been assigned to each 11KV feeder emanating from injection substations that feed specific areas in the four states.

    She said in Edo  for instance, BEDC was creating conducive environment for companies to grow by balancing power given to both residential, communities and industrial locations, adding that the idea would enable industrial concerns reduce cost of production, drive economic growth and also create jobs for the unemployed youths in the area.

    This, she said, is in addition to the efforts of the firm to subsidise electricity it  is supplying  residential customers in the state.

    On Concept Route Marshall, she said the initiative was borne out of the need to enhance customer relations and improve the company’s commercial field operations.

    “A route is defined as collection of customers in certain transformers in some particular route(s) which the assigned officers will be expected to manage and ensure customers on it are properly managed/served. This includes bringing into the company records of all consumers that may have been connected illegally to the company’s network.

    Also, the Executive Director, Commercial, Mr. Abu Ejoor, said since take-over on November 1, 2013, BEDC had metered over 150,000 customers, increased injection sub-stations from 38 to 64, added several distribution transformers into its network and also upgraded its 33KV feeders. He assured customers of improved power supply through off-grid arrangement with Independent Power Plants (IPPs).

    On vandalism, BEDC Safety Manager, Mr. Gilbert Nweke said BEDC has commenced fencing of its distribution sub stations with transparent wire gauze, fixing signage to warn people against trespass and giving support to Police and Nigerian Security and Civil Defence Corps (NSCDC) to arrest and prosecute vandals. To curtail meter bypass, hanging of wires and tampering with BEDC equipment/installations, Nweke said pole-mounted meters and High Voltage Distribution System (HVDS) and constant monitoring of meters were being done.

  • Petralon appoints strategic advisor

    Petralon Energy Limited has appointed Mr. Constantine ‘Labi Ogunbiyi as Strategic Adviser to its board.

    Ogunbiyi founded First Hydrocarbon Nigeria Limited (FHN), where he served as chief executive officer between 2009 and 2014.  Before he started FHN, he served as deputy head of American law firm Cadwalader, Wickersham & Taft LLP’s Africa Practice.

    He worked with the International Finance and Banking Department of Magic Circle law firm, Herbert Smith Freehills for four years; served as an advisor to the Banking Association PPP Unit of the Southern African Development Community (SADC) and also offered strategic advisory services to The New Partnership for Africa’s Development (NEPAD) Business Group.

    He currently serves as Director to Newrest ASL plc and Interswitch Limited and is a Special Advisor to Babban Gona (an agricultural franchise, developed by Impact Investing Firm, Doreo Partners),and several upstream (Exploration &Production) companies, oil services firms, and investment firm in Africa.

    He holds legal certificate from King’s College, London , University of Passau, Germany, and the Oxford Institute of Legal Practice.

    As Strategic Advisor, he works closely with Mr Mutiu Sunmonu, Chairman of the Board and non-Executive Directors, Ms Edith Unuigbe and Mr Aigboje Aig-Imoukhuede.

    Sunmonu has 36-year experience in the oil and gas sector, where he worked with  Shell Petroleum Development Company as Managing Director.

    Also recently appointed to the board, Ms Unuigbe, worked for over 20 years at Nigeria LNG (NLNG) as General Counsel and Company Secretary/Legal Adviser. Mr. Aig-Imoukhuede, Founder and Chairman of investment firm, Coronation Capital, was a former Managing Director of Access Bank. He serves as the President and Chairman of the National Council of the Nigerian Stock Exchange and Wapic Insurance.