The Nation Newspaper

Category: Energy

  • Nigerians spend N3.5t on fuelling generators’

    Nigerians spend an estimated N3.5 trillion yearly on fuelling generators to meet commercial and domestic needs , as grid power is seriously inadequate. A report from GIZ, a German-based firm, said generators provide alternative source of energy and further improves economic activities for the country.

    The firm, which specialises in offering solutions to countries in solar and other forms of renewable energies, in a report, made available to The Nation, said Nigeria was one of the major importers of generating sets in Africa, noting that the country has spent huge amounts of money on buying, using and servicing generators.

    It said Nigeria has been spending between N3trillion and N3.5trillion yearly on fuelling generators in the past three years, adding that the country mostly imports generators from Asian countries such as China, Japan and others.

    The firm said it was working on a study that would capture the expenditure incurred on importation and maintenance of generators in Nigeria and other African countries for 2016, adding that generators consume huge volumes of fuel after automobiles in Nigeria because power supply is not regular.

    It said Perkins and other brands were used by manufacturers because they help in sustaining production activities.

    The President, Renewable Energy Association of Nigeria (REAN), Mr. Segun Adaju, said the N800billion given by the Nigerian Bureau of Statistics (NBS) as the expenditure on fuelling generators in a year was small when one considers the fact that the country was running what he described as a ‘generating economy.’

    He said virtually every home and office uses generators, adding that the cost of fuelling them run into billions of naira daily. According to him, firms, especially manufacturers, spend billions of naira weekly to procure fuel for generators. He added that they use high-powered generators that consume more fuel.

    Adaju said: “Though the German firm didn’t provide insight into how it arrived at N3.5trillion yearly spend on fuelling generators in Nigeria, its findings are not far from truth given the fact that Nigerians use generators a lot.

    “Millions of people use the smallest size of generators popularly called I better pass my neighbour. The cost of fuelling this brand runs into millions in a day let alone heavy brands such as Perkins that consume drums of diesel in day. Companies that use Perkins and other brands spend on average between N30million to N40million a day.”

    According to him, the study conducted on the use of generators in Nigeria by his association showed that individuals and companies spend billions of naira on generators monthly.

    Adaju, who is also the Chief Executive Officer of Consistent Energy Limited, urged Nigerians to explore opportunities in solar and other renewable energies to save money. The need to save money informed the decision of his association to create awareness on the use of solar, wind, coal and biomass forms of energy, he added.

  • Fed Govt urged to fast-track negotiation with militants

    The Federal Government should fast-track the process of negotiating with the Niger Delta militants, particularly the Niger Delta Avengers (NDA), to ensure uninterrupted operations and resumption of oil exploration and production activities in the region stakeholders have said.

    This is coming on the heels of a recent statement by the Minister of State for Petroleum Resources, Dr Emmanuel Kachikwu, that negotiation with the militant groups is ongoing and would be concluded soon.

    A Senior Lecturer, Energy Law, University of Lagos, Dr Dayo Ayoade, urged the government to expedite action on the issue of negotiating with the Niger Delta Avengers in order to end the crisis in the region.

    He said the government saw negotiation as a tool for managing crisis and it should use it well. “There is nothing wrong in government negotiating with the militants in the Niger Delta. The issue does not have legal implication. The Federal Government has the right to protect its people, its assets and other things, hence its decision to negotiate with the militants. President Jonathan did the same thing. However, the government should try and do it in time to avoid bigger crisis,’’ he said.

    Ayoade urged the government to resolve the problem as members of the Nigerian Armed Forces were overstretched fighting Boko Haram insurgents.

    The Niger Delta Avengers had bombed oil facilities belonging to Agip, Chevron, Shell and other International Oil Companies (IOCs).  This has affected crude oil production as well as the capacity of power firms to access gas for generation.

    Also, a Director, Centre for Energy Studies, University of Port Harcourt, Prof Omowunmi Iledare, has urged the government to negotiate with the group in time to save the country from further losses. “It is a terrible thing for the government not to negotiate with criminals. To the best of my knowledge, anybody who overtly or covertly destroys public assets, more so oil and gas pipelines, are criminals and they should be treated that way. You don’t negotiate with criminals. Instead you allow the law to take its course.  Former President Jonathan negotiated with militants in the oil producing areas of Niger Delta.

    Iledare, a former President of International Association of Energy Economist (IAEE) Nigerian Chapter, urged the government to do everything possible to resolve the issue of destruction of oil and gas facilities

  • NLNG moves to ease cooking gas supply

    NLNG moves to ease cooking gas supply

    To make the supply of liquefied petroleum gas (LPG) or cooking gas easy, the Nigeria Liquefied Natural Gas Limited (NLNG) and the international auditing firm, KPMG have carried out studies to find out what makes supply of the commodity cumbersome in the country, The Nation has learnt.

    NLNG’s immediate past Managing Director, and Vice President, Safety and Environment (S&E), Shell Upstream International Leadership Team, Babs Omotowa, told The Nation that the studies have been completed and that the gas company was working with the government to remove all bottlenecks to make the commodity readily available in the country.

    Omotowa said the Nigeria LNG carried out study on the issue and hired KPMG last year to carry out its own study, adding that the auditing firm has submitted its findings, which are currently being worked on.

    He said: “At NLNG, we have carried out a study, we also appointed KPMG late last year to carry out a study on what needs to be done to unblock all of these challenges and they have submitted their report. We have also engaged with the Vice President’s Office and we are working with the VP’s office around how the government will take the lead on unblocking all these issues and the private sector will also make an investment.”

    The Liquefied Petroleum Gas Retailers (LPGAR) had accused a cabal that hijacked the LPG business in Nigeria for being responsible for the problems in the LPG subsector.

    LPGAR National Chairman, Mr. Michael Umudu, told The Nation that the LPG business has been hijacked by a cabal. The hijack, according to him, accounted for   the price of the commodity rising from N2.3 million to N4.3 million for 20 tonne, and the cost of filling a 12.5-kilogramme cylinder from N2,500 to N4,000.

    Umudu said: “I am not here to mention names, but we all know that NLNG appointed a selected number of firms to receive and market the product. They should explain to us the factors that brought us to this precarious situation. They (off-takers) should explain to LPG stakeholders, the government and the consumers what happened. We worked together to persuade the government to intervene when the sector was almost dead in 2007.”

    But Omotowa noted that the major problem in LPG supply is infrastructure deficit. “I think the challenge in LPG is one around infrastructure. We need as a country to build more receiving terminals. The only two terminals we have in Lagos are not enough. We have to build more terminals in Port Harcourt and Calabar. We have to invest in transportation of LPG from those terminals into the country either by rail or by trucks. We have to ensure as a country that we have enough distribution centres across the country. So, there is quite a lot of infrastructure work that needs to be done.

    “At NLNG, we are not aware of any cabal, we do not subscribe to any cabal. We supply to any terminal that is available. We are encouraging any person, who is able to invest in any other terminal to invest so that the product can be made available. We are working with the government both the executive and the legislature on actually how to unblock all the challenges across the entire value chain so that LPG is available not just in Lagos, but in Sokoto, Kano and Kaduna so that the issues around deforestation and people chopping trees can reduce and health and environmental concerns of people in those areas can be further improved.”

  • Saipem nears completion of Egina FPSO project

    Saipem Contracting Nigeria Limited (SNCL) has completed the fabrication of some components of the floating production, storage and offloading (FPSO) vessel for the Egina field operated by Total Exploration and Production Nigeria Limited.

    The completion of Umbilicals, Flowlines, Risers (UFR) works by Saipem further confirmed that the 200,000 barrels per day capacity floating vessel would be ready for use next year. The contract was awarded to Saipem in 2013.

    Egina field located in Oil Mining Lease (OML) 130 is slated to begin production next year, and the FPSO is scheduled to arrive in Nigeria in April 2017 from the Samsung Heavy Industries fabrication yard in Korea. The cost of the FPSO is estimated at $3.3 billion.

    Speaking at the load out ceremony of the Umbilicals, Flowlines, Risers held at Saipem yard, Rumuolumeni, Rivers State, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Dr. Maikanti Baru, commended Saipem for doing majority of the engineering and fabrication work of the UFR project in Nigeria, particularly the fabrication aspect that was carried out at Saipem’s yard.

    “Millions of man-hours were expended on this project, new local vendors and sub-contractors emerged, an appreciable number of young engineers (75) have been trained, artisanal skills have been improved and new skills sets have been developed by way of the Egina UFR project,” Baru said, stressing that the feat would be replicated on a larger scale in similar new projects expected to come on stream in the near future.

    The NNPC chief, said: “I am aware that the Egina UFR component involves the engineering, procurement, construction, installation and commissioning of 52km of oil production and water injection flow lines, 12 flexible jumpers, 2km of oil export line, 20km of gas export pipelines alongside the installation and commissioning of 80Km of steel tube umbilicals and mooring of the FPSO and offshore Oil Loading Terminal (OLT) buoy. The local scope includes 6.3 million man-hours or 90 per cent of the entire package without Lost Time Injuries (LTI), 15,514 tonnes of fabrication (86 per cent of the package) and other procurement scope.

    “I recall that Saipem also handled the UFR modules for both Usan and Akpo fields, which are currently in production. I have full confidence that the lessons learnt in the execution of both Usan and Akpo UFR and recent technological advances have been incorporated in the Egina UFR,” he said.

    The Managing Director of Saipem Contracting Nigeria Limited, Guido D’Aloisio said he was pleased to see the firm reach the point  of load out of the UFR, adding the project consumed 14 million man-hours without Lost Time Injury (LTI).

    The Managing Director and Chief Executive Officer of Total, Nicholas Terraz, said the UFR project was tangible indication that the company was moving towards its target of delivering the project.

    He said the Egina project was the largest oil and gas project ongoing in Nigeria. “Egina UFR project is a project of record setting, together with all our contractors we say that it is a project with the highest Nigerian content, technology transfer and capacity development involving the fabrication of over 60,000 tonnes of equipment,” he said.

    The Executive Secretary, Nigerian Content Development & Monitoring Board NCDMB, Simbi Wabote who was represented Mr. Daziba Patrick Obah, expressed delight with the level and quality of job done, saying they were made possible by policies fashioned by the NCDMB.

    The Chairman, House of Representative Committee on Local Content, Emmanuel Ekon, said he was satisfied with Saipem because Nigerians undertook the sophisticated welding jobs in the firm.

  • IFC, DFID partner to improve SMEs’ access to electricity

    International Finance Corporation (IFC), a member of the World Bank Group and United Kingdom’s Department for International Development (DFID) are partnering to facilitate the deployment of off-grid and embedded solar systems in commercial and industrial sectors of Nigeria.

    According to an official of IFC, Ejura Audu,  the ultimate goal was to help corporate organisations and small and medium scale entrepreneurs (SMEs) to have better and more reliable access to electricity, utilising the country’s abundant solar resources.  He added that this would contribute to Nigeria’s economic growth and greenhouse gas emission reduction.

    Through this deal, IFC’s Off-Grid and Embedded Solar Market Development and Finance Programme, and DFID’s Solar Nigeria Programme will launch a new programme for solar market development and finance.

    One of the major components of the partnership is the provision of technical support and financial instruments to financial institutions.This will help them develop business solutions for the emerging solar market, especially solar PV technology investments in Nigeria.

    The programme is being launched at a workshop that will share market study findings, present the key components of the programme implementation phase, and collect feedback from stakeholders.

    DFID Nigeria’s Head of Office, Ben Mellor, said: “The UK Government is committed to helping to increase investment in off-grid energy and accelerating the delivery of solar energy systems that will help improve access to energy for more businesses. As access to energy is one of the most critical business needs in Africa, particularly Nigeria, the UK’s Department for International Development is determined to assist in bringing solar technology financing solutions to smaller businesses and corporates,  and we are working with IFC to help implement these solutions.

    “IFC has been at the fore, creating and facilitating solutions to help increase access to energy at the home and corporate levels in Nigeria,” said Eme Essien Lore, IFC Country Manager for Nigeria.

    “The solar market has the potential for quick wins in bringing access to electricity for more businesses as it takes less time to install. It also enables production of electricity at the point of need, which eliminates transmission losses to a great extent. We are working with DFID to accelerate access to electricity for more businesses and help contribute to economic growth in the country,” she added.

    The programme is part of the World Bank Group’s Energy Business Plan for Nigeria where each institution in the World Bank Group (IFC, IBRD and MIGA) will leverage their competencies and products to provide solutions for projects and sustain the power sector.

    Over the past three years, the IFC has financed close to $3.5 billion in renewable energy projects worldwide, including biomass, geothermal, hydro, solar, and wind.

  • ‘Govt needs N3.25t to generate 20,000Mw of power’

    The Federal Government requires $20 billion (about N3.25 trillion) to provide 20,000 megawatts (Mw) of electricity by the year 2020, the Managing Director of KAIROSTS Nigeria Limited, a financial advisory firm, Mr. Olajuwon Olaleye, has said.

    Olaleye, who was an aide to the former Minister of Power, Prof Chinedu Nebo, said the sector would receive new impetus when the National Assembly approves the appointment of the Chief Executive Officer of the Nigerian Electricity Regulatory Commission (NERC) and other key officials, adding that the government expects the Senate to expedite actions on the process soon.

    Olajuwon in an interview with The Nation said the appointment of officials of the Commission and other agencies in the sector are crucial to the government,  as it would impact on the sector positively.

    He said Nigeria needs $1million to generate megawatts (Mw) of electricity, which means that the country would be spending $20billion to provide 20,000Mw of electricity.

    He said the country was in a critical financial position and that it would need to raise funds through Foreign Direct Investments (FDIs) and signing of agreements with donor agencies in Europe and America to be able to provide 20,000Mw of power and further improve supply.

    Olajuwon, an adviser on Investments, Finance and Donor Relations to Prof. Nebo during his tenure as the Minister of Power, said it had become imperative for Nigeria to partner donor agencies abroad, in order to finance the sector in view of the recession plaguing the economy.

    Olajuwon said: “There is no doubt that Nigeria is in a very critical situation financially and would need to partner donor agencies and foreign investors in order to finance key infrastructural projects in the petroleum and power sectors. Once this is done, activities would be galvanised in areas such as power generation, distribution and transmission.”

    He quoted the Minister of Finance, Mrs. Kemi Adeosun,  as saying at the ongoing World Bank conference in Washington, United States, that the country needed money to finance its power sector and others that were germane to the growth of the economy.

    “The Finance Minister, Adeosun, last week in Washington, overtly or covertly expressed the desire of Nigeria to welcome foreign investors and institutions that can raise fund to finance the economy, especially the power sector.  This shows that Nigeria needs external funding sources to bring the economy, nay the power sector back to life,’’ he said

    In a related development, former President, International Association of Energy Economists (IAEE), Prof Adeola Akinnisiju, said money needed to be injected into the electricity sector to make it viable.

    He said power industry survives in developed economies such as the United States, Europe and others because it is well managed and also boasts of good managers.

    “When money is properly channeled into the power sector, coupled with good management, the industry will perform optimally and generate enough electricity for the country.  The sector is in a comatose because problems exist across the value chain – generation, distribution and transmission,” he said.

  • Shell awards scholarships to 60 Niger Delta pupils

    Shell awards scholarships to 60 Niger Delta pupils

    A new batch of 60 pupils from the Niger Delta has been awarded the special secondary school scholarship of the Shell Petroleum Development Company (SPDC) Joint Venture’s Cradle to Career, covering tuition and  other bills for six years in four of the topmost private secondary schools in Port Harcourt.

    Brookstone Secondary School, Jephthah Comprehensive College, Archdeacon Brown Educational Centre (ABEC) and Bloombreed High School in Port Harcourt will receive 60 beneficiaries yearly from difficult terrains of the Niger Delta on scholarship for their secondary education, after a two-week orientation  with introductory courses in academics, character and psychology.

    The pupils are the seventh set of beneficiaries, bringing the number of beneficiaries since inception of the Cradle to Career programme to 410.

    SPDC Managing Director and Chairman, Shell Companies in Nigeria, Osagie Okunbor, represented by the General Manager External Relations, IgoWeli said: “This year, the first set of beneficiaries completed their secondary education and the report we have is that about all of them recorded excellent performance in the school certificate and unified tertiary matriculation examinations. It means the aims of the programme are being achieved.”

    Speaking at the ceremony in Port Harcourt, the SPDC chief said Shell and its joint venture partners had sustained the scholarship initiative despite the economic challenges because they see education as a right for every child and not a privilege.

    Dr Patricia Ogbonnaya, Mrs Elizabeth Alagoa and Dr Moses Onoriode Bragiwa, representatives of the Rivers, Bayelsa and Delta states Commissioners for Education, extolled the scholarship scheme for complementing their governments’investments in education. They praised the transparent selection and the human capital development benefits of the programme to the region.

    “SPDC has a passion for investing in people and we are happy to report that students in the programme have over the years been on the top of their classes in their respective schools. We thank Shell and their joint venture partners for helping to ameliorate the problems of the Niger Delta,” said Dame Christie Toby, the proprietress of one of the implementing schools.

    The SPDC JV launched the Cradle to Career initiative in 2010 to provide for bright indigent students and improve on the positive results of its other portfolio of scholarship schemes for local and international undergraduate and postgraduate studies.

    Shell companies in Nigeria support education through scholarships and other initiatives. In 2015, SPDC Joint Venture and Shell Nigeria Exploration and Production Company (SNEPCo.) invested $10.1 million in scholarships.

    Grants were awarded to 930 secondary school pupils and 638 university undergraduates last year, with a total of 10,401 (secondary) and 3,532 (university) grants given over the last five years.

  • IFC, DFID partner to improve access to electricity by SMEs

    International Finance Corporation (IFC), a member of the World Bank Group and United Kingdom’s Department for International Development (DFID), have partnered to facilitate the deployment of off-grid and embedded solar systems in commercial and industrial sectors of Nigeria.

    According to Ejura Audu, an official of IFC, the ultimate goal is to help corporates and small and medium scale enterprises (SMEs) to have better and more reliable access to electricity, utilising the country’s abundant solar resources, and thus contributing to Nigeria’s sustainable economic growth and greenhouse gas emission reduction objectives.

    Through this partnership, IFC’s Off-Grid and Embedded Solar Market Development and Finance Program, and DFID’s Solar Nigeria Programme are launching a new programme in Nigeria for solar market development and finance. One of its major components will be to provide technical support and possibly financial instruments to local financial institutions. This will help them develop business solutions for the emerging solar market especially solar PV technology investments in Nigeria. The programme is being launched at a workshop that will share market study findings, present the key components of the programme implementation phase, and collect feedback from stakeholders.

    Ben Mellor, DFID Nigeria’s Head of Office, said: “The UK Government is committed to helping to increase investment in off-grid energy and accelerating the delivery of solar energy systems that will help improve access to energy for more businesses. As access to energy is one of the most critical business needs in Africa and particularly Nigeria, the UK’s Department for International Development is determined to assist in bringing solar technology financing solutions to smaller businesses and corporates and we are working with IFC to help implement these solutions.”

    “IFC has been at the fore, creating and facilitating solutions to help increase access to energy at the home and corporate levels in Nigeria,” said, Eme Essien Lore, IFC Country Manager for Nigeria.

    “The Solar market has the potential for quick wins in bringing access to electricity for more businesses as it takes less time to install. It also enables production of electricity at the point of need, which eliminates transmission losses to a great extent. We are working with DFID to accelerate access to electricity for more businesses and help contribute to economic growth in the country,” she added.

    This programme is part of the World Bank Group’s Energy Business Plan for Nigeria where each World Bank Group institution (IFC, IBRD, and MIGA) leverage their competencies and products to provide solutions for projects that encourage the viability and contribute to the sustainability of the power sector.

    Over the past three years, IFC has financed close to $3.5 billion in renewable energy projects worldwide, including biomass, geothermal, hydro, solar, and wind.

     

  • UN report on oil crises ready next year

    The report of the United Nations’ (UN) findings on the problems rocking the oil and gas, maritime and other sectors will be ready in the first quarter of 2017, Lagos Deep Offshore Logistics Base (LADOL) Managing Director Dr Amy Jadesinmi has said.

    She told The Nation that the UN was relying on the Business and Development Sustainable Commission (BDSC) – to get the findings ready as well as map out strategies on how to facilitate growth in the petroleum and allied sectors.

    Jadesinmi said the UN was keen on solving problems affecting downstream and upstream sub-sectors of the petroleum industry and other areas. The global body  wants to see women playing important roles in this regard.

    Jadesinmi said: ‘’The findings will be finalised in the coming months and will take the centre stage in the Commission’s report, which aimed at spurring growth of privately-driven initiatives in the oil and gas, maritime and others.The Commission was launched in January 2016 by UN, to advance the world’s transition to a more prosperous and inclusive economy. Though the findings were yet to be released, significant growth opportunities in the petroleum and other sectors of the economy are going to be found in the findings.

    “In the findings, we will identify major financing challenges, as well as potential solutions. The solutions include  prioritising the long-term investments in private sectors, making businesses, governments and civil societies create enabling environment, with a view to provide sustainable growth.’’

    The LADOL chief, a participant at the just-concluded UN’s General Assembly in the United States, said the Commission is key to the growth agenda initiated for the development of the global economy by the United Nations.

    She said sequel to the UN’s high- level panel on Women Economic Empowerment Report released on September 22, 2016, the International Commissioners Forum, in which she was a participant, was organised to discuss modalities on how to engender growth in the oil and gas, maritime and other sectors.

    The Commission’s vision, Jadesinmi said, is in line with that of LADOL, which seeks to develop investment opportunities in the nation’s oil gas, by partnering with Samsung Heavy Industries (SHI) Korea to build a Floating Production, Storage and Offloading (FPSO) vessel and fabrication yard for the operators.

    According to her, LADOL has built a $500million Free Trade Zone, urging other operators to leverage the idea known as Sustainable Development Goals (SDGs) to record success.

    She said Nigeria is leveraging its potential to be the hub of oil and gas business in West Africa, stressing that LADOL was working to fulfill the dream.

  • Fashola: govt’ll recover 900 seized power tools’containers

    The Federal Government is  to recover 900 containers of transmission equipment seized by the Nigeria Customs Service (NCS).

    The equipment were siezed, following the importers’inability to pay their duties.

    Minister of Power, Works and Housing Mr. Babatunde Fashola, said at a stakeholders’forum organised to create awareness on the use of made-in-Nigeria products in Lagos that the government would first recover 400 containers, and later the others to improve power.

    According to him, the delay of clearing was caused by the inability of the importers, mainly contractors hired by the government, to execute power projects to raise money for clearing.

    Fashola said: “Several transmission projects have been delayed; the contractors handling the projects have either abandoned them or refused to commence work on them, due to funding. As we speak, the government is trying to recover some containers of transmission equipment that was trapped at the ports. Shortage of equipment is making the country to experience transmission hiccups.”

    The minister said  problems in the value chain could be seen in the poor electricity generation, distribution and transmission in the country.

    The grid, Fashola said, could wheel only 3,500 megawatts (Mw) of electricity, adding that the grid can be expanded to 5,700Mw by syncronising and simulating it.

    The Minister said when the grid is expanded, it would help in wheeling and boosting electricity supply in Nigeria.

    On review of the Electric Power Sector Reforms Act (EPSRA) of 2005, which set the tone for the reforms in the industry, Fashola said the EPSRA could only be reviewed when Nigerians provoke a debate on the Act if there is need to change some grey areas in it.

    He said the government was leaving the review of the Act at the doorsteps of Nigerians in order to align  with the democratic norms, which emphasise the need for the citizens to have a voice on who, why and how their government is being run.

    He said: “The parliamentarians who enacted the laws guiding the 2005 power sector reforms deserve some commendations. However, there is need for improvement because anything done by men and women is not perfect. Whenever there is a rethink on legislations on any issue, the people, who elected the parliamentarians, must come in. This is the time, in which people, must speak to their representatives on laws that require some amendments or modifications. This is what lobbying is all about.

    “Is there a legislation, which endures forever? Is anything made by men and women perfect? I have my issues in the ways and manners in which the privatisation process was carried out. But the question is: Can I unmake yesterday? Not in the way some people are expecting but I can make it better. If the review of the Act would be good, I would take to that but the operators in the sector must show a reasonable level of support. I mean the support that would be in the interest of the larger society.’’