The Nation Newspaper

Category: Energy

  • Shippers set access to gas pipeline

    Shippers set access to gas pipeline

    •Constitutes committee to explore possibilities

    The West African Gas Pipeline Company (WAGPCo) has opened its pipeline to be accessed by independent gas shippers to maximise the potential of the facility, which  has been underused over the years.

    Its General Manager, Corporate Affairs, Mrs. Harriet Wereko-Brobby, said the management decided to open the facility so that there should be additional gas to fill it.

    Data show that the capacity of the pipeline is 474 million standard cubic feet of gas (mmscf) but the contractual volume signed with the foundation customers is 134mmscf, which is about 170 million British thermal unit Btu. British thermal unit is used to measure the energy of gas, that is, the caloric value (heat content), while the volume of gas is measured in standard cubic feet.

    She said what the company wants to achieve by opening access to the asset is to put into use a substantial part of the unused capacity. The data obtained by The Nation, shows that even if the entire foundation customers’ volume of 134mmscf is fully utilised, there is still 340mmscf unused capacity. Therefore, by opening access to the pipeline, the company tries to encourage independent gas shippers to buy gas directly from producers, that is, oil companies in Nigeria such as Shell, Chevron, Seplat, Total, among others, after which WAGPCo will transport the gas to the shipper’s destination in Togo, Benin Republic and Ghana.

    However, such shippers, according to WAGPCo, will be registered and licensed, and must meet all the necessary requirements and standards needed by the regulator, West African Gas Pipeline Authority (WAGPA).

    WAGPA regulates WAGPCo as the Department of Petroleum Resources (DPR) regulates the Nigerian oil and gas industry, so before WAGPCo moves gas for a shipper, the shipper must have a licence, have the gas, demonstrate ability to meet specification, and ensures meeting all the requirements.

    Mrs Wereko-Brobby said: “What we have been doing is encouraging and working with our stakeholders, that is, those for whom we transport gas to enter into arrangement with the producers of that gas so that we would be able to fill our pipeline. Some of them in Ghana, Togo and Benin Republic, have started engaging with gas producers in Nigeria trying to get contract memoranda of understanding so that they would be able to get additional gas to fill our pipeline.

    “At the same time we are continuing our engagement with those protecting our pipeline. We have had two forums; we brought together the stakeholders, subject matter experts from different organisations, naval forces, maritime and ports authorities from different countries. They all came together, sat down and talked about what can be done and how to protect the pipeline. And they also indicated their interest in protecting the workers giving instances of pirates that are not only dangerous to WAGPCo but also all the companies that have formations in the sea. So in the sub-region and even on the ECOWAS’ level, they have assured that it is a matter of highest priority to protect the pipeline and all the nations are collaborating to do that.

    “We brought them together so that we can discuss not only the physical protection but any technological advancement that we can take advantage of.  The success of WAGPCo is very important to ECOWAS. What they feel is that if WAGPCo succeeds, that means all other efforts for regional integration can succeed, so they are very interested in WAGPCo success as a way of making sure that we will have a framework for regional integration programme.

    “We also have a committee set up right now that will set forward the programme. The committee will try and come up with different methods of protecting the pipeline and also ensuring the reliability.

    “The committee is now developing its terms of reference and the expectation is that the terms of reference will be prepared by next month. Once members of the committee come up with their terms of reference, which will be within the next six months to one year, they should have come up with a plan, which will be commenced immediately after. Some of the actions that were identified at that forum such as physical patrol have been started.”

  • Kwankwaso, NERC, TCN chiefs for WorldStage confab

    Kwankwaso, NERC, TCN chiefs for WorldStage confab

    KANO State Rabiu Musa Kwankwaso, Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi, and Managing Director of Transmission Company of Nigeria (TCN), Mr. Mack Kast, among others, have confirmed participation in the fourth WorldStage National Electricity Power Conference.

    According to the organisers of the conference, the event has been rescheduled to hold on October 23, from the September date earlier announced. But the venue remains Lagoon Restaurant, Victoria Island, Lagos. The date was shifted to accommodate more requests for participation.

    The event will be chaired by President of Lagos Chamber of Commerce and Industry (LCCL), Alhaji Aderemi Ismaila Bello; Amadi is expected to deliver a paper titled: ‘Commitment of NERC towards regulation and effective consumer’s right on electricity supply chain’  and the TCN boss will speak on ‘TCN: Meeting the electricity transmission capacity for Nigeria post-privatisation.’

    Governor Kwankwaso, whose state has achieved commendable progress in power generation through independent power projects (IPPs) for economic development, will share his experience with participants at the forum.

    The President/Chief Executive Officer, World Stage Limited, Mr. Segun Adeleye, said with about 30 million households in Nigeria still without access to electricity even liberalised electricity power sector, it is crucial for stakeholders to meet to address the challenges facing the power sector.

    He said: “The challenges that surfaced with the new dispensation are numerous but not un-surmountable.” He listed these to include the rising activities of vandals who burst gas pipelines and other power transmission equipment; high level of power theft and meter bypassing; gas supply limitation; revenue collection; transmission wheeling capacity; funding model for transmission; expected declaration of Transition Electricity Market; lack of accurate data on power demand of the entire country; non-alignment of the entire value chain of power generation, transmission and distribution; security of investment; right pricing and efficient usage of available electricity; paucity of fund for transmission facility upgrade and replacement of aging 132KV lines.

    “As banks invested about N750 billion in the power sector since its privatisation, it’s imperative that the security of this huge exposure rests squarely on stakeholders to ensure success of the privatisation process,” he said.

  • Oil glut beyond OPEC’s control

    Oil glut beyond OPEC’s control

    The supply side glut in the oil market combined with the decline in global demand makes it difficult for oil producers to effectively exercise any control over oil prices, according Seth Kleinman, Citi Energy Analyst.

    According to Hellenic Shipping News, even in the context of recent serious geopolitical issues that could potentially cause supply disruptions and high oil prices, the world is witnessing a decline in oil prices. Brent has traded since early July within the range of $95 to $110. It is hovering around $98 to $100 a barrel on the London-based ICE Futures Europe exchange.

    On the supply side a lot of excess stocks combined with new sources of production such as US shale oil, massive gas substitution are depressing the oil prices. Kleinman said the medium term outlook for oil demand is not encouraging as the emerging market demand growth, particularly from China is on a decline.

    The long held belief that emerging markets are perennial sources of oil demand is fast changing partly because of the changes in economic growth dynamics and partly because of massive energy substitution of natural gas — often obtained through the hydraulic fracturing of shale rock for oil, and fuel-efficiency mandates in many key countries.

    Kleinman said the prospect of oil demand hitting a plateau this decade looks increasingly possible than the market seems to think. The Shale boom in the US has already upended energy markets and it has largely accepted the fact that the spread between gas and oil will stay wide for the foreseeable future.

    The huge rush for substitution of oil with gas in the US, Europe and some of the leading emerging markets like China and Latin America is going to have a long-term impact on oil prices than previously anticipated.

    While European regulations are also putting pressure on its oil industry, even in China LNG substitution in automobile sector is happening on a massive scale. In February last year the European Commission issued draft legislation that would mandate LNG filling stations be located every 400km on the core trans-Europe highway network. This same legislation will mandate LNG filling stations be located at all 139 maritime and island ports in Europe, also by 2020.

    Kleinman said increased focus on fuel economy across the US, Europe, Japan and China have started impacting the oil demand. Research by Citigroup estimates that new vehicles’ fuel economy is increasing by about 2.5 per cent a year.

    Adding to the downward price pressure on oil will be the lack of incentive for Middle Eastern oil producers, particularly Saudi Arabia to cut production. Petroleum exports account for about 90 per cent of Saudi Arabia’s state budget. Saudi Arabia announced $130 billion of investment in 2011 to create jobs and a $500 billion plan infrastructure projects, making deep cuts to stabilise the market a difficult possibility.

  • FirstBank to fund firm’s multi-billion dollar project

    First Bank Nigeria Plc is to finance the multi-billion fabrication and construction yard of Kaztec Engineering Limited, a subsidiary of Chrome Group. The project is located at the Snake Island, Lagos.

    The  bank management led by its Group Managing Director, Mr. Bisi Onasanya, toured the facility to assess the project and determine the level of finding for the company.

    First Bank’s Group Executive, Institutional Banking Group, Bashirat Odunewu,  told The Nation that the bank was impressed with some of the jobs done by Kaztec for some oil exploration and production companies.

    She said Firstbank would  finance the project, but did not state to what tune. She said the bank is financing the Chrome Group’s power firm, the Enugu Electricity Distribution Company.

    However, she couldn’t confirm whether First Bank alone will finance the Snake Island project, or whether it will be done in partnership with other banks. She only said that as the project is being done in phases, there is a ratio Kaztec has to bring and some that First Bank will fund. Sometimes, we invite some of our colleagues if we need to do syndication. Sometimes, we do it on our own. You know that for the banks, there is a certain limit set by the financial sector regulators and you cannot go beyond that for any particular customer, she added.

    On the impression of the bank after the tour, she said: “It was impressive because Kaztec is 100 per cent Nigerian company. They made presentation to us, and we had a walk round the facility. I must say that all the things we saw were very encouraging especially when a Nigerian company can do such good technical work. They showed us what they were doing presently and even those that have been concluded; a lot of engineering and technical works. These are works that are normally given to foreign companies to do in the past. Also, their client, Addax Petroleum, was satisfied with what they are doing. We are interested in what they are doing. We went to see what is on ground and how far we can support them.”

    She debunked allegation that First Bank doesn’t finance oil and gas activities. She said: “To say that First Bank is not active in the oil and gas industry is not correct. We are very much involved in the oil industry. We are actually in the fore-front of oil and gas activities. As at today, I think we are among the top three in oil and gas, but we don’t make too much noise about it. Our customers know we are the first point of contact in whatever they want to do because they know we have a lot of expertise in it. Sometimes, we work with our sister company, FBN Capital. So there is hardly any transaction you can talk about in the recent times that we are not part of.

    “Also, it is not difficult for Nigerian companies to access facilities from the banks but they need to know that first, they have to be competent, and be able to prove to the bank that they have already invested some of their own equity into the project. In the banking industry, we have what we call bankable projects, so someone doesn’t wake up to say, I want to do a yard like what Kaztec has in the Snake Island, and tells the bank to finance it. The firms have to use some of their own funds. The idea is that when you start, you have to show that you can manage funds on your own, and when the banks see what you are doing and where you are going; they will work along with you. But a lot of people don’t want to do anything on their own first; they want the banks to finance everything. But you must show your own commitment before the banks can come in to assist you. Sometimes, a group can come together to pool resources and once the banks can see how far they have gone, the banks will join them.”

    “We were already involved with Kaztec in other areas such as the electricity distribution company in Enugu. We were their banker, so we have a relationship with the company and we know what they are doing. As the banker, we have to know what they are doing, we need to know where the next good transaction is going to happen; there is no more armchair banking.”

    The Group Head, Institutional Banking Group – Energy, Mr. Olalekan Adenekan said: “The bank had last year alone, invested over $1.2billion in oil and gas. This comprises upstream- exploration and production; and midstream companies where you find Kaztec. Let me say that Kaztec is really one of the top three companies in Nigeria today and I am happy to say we are in the forefront of supporting all these companies. So in terms of investments, we are very high in the industry.”

    Chrome Group’s Business Development & Head Communications, Dr. Edwin Ndukwe, said: “The Snake Island project is being done in phases, phases 1-4. Phase 1 is the fabrication yard, while Phase 2 is the pipe rolling and pipe coating yard. Phase 3 is the drydock yard, where we will be doing the refurbishing and rehabilitation works for boats, tug boat, barges and other marine vessels. The Phase 4 is the logistics base. Right now we are still in the Phase 1. We are anticipating the end of this year for the completion of phase 1. There is work ongoing at the moment, which is establishing the concrete yard, the workshops, the blasting and paint shops, which are all under construction now. By next year, we will be moving into the pipe laying and pipe coating stage.”

  • Akpabio intervenes in Mobil, host communities’ feud

    Akwa Ibom State Governor,  Godswill Akpabio has urged ExxonMobil’s host communities to withdraw pending law suits to enable the company execute projects in their areas.

    According to the Governor’s Special Assistant, Media, Deacon Jackson Udom, Akpabio made the plea when the Chairman/Managing and Lead Country Manager of ExxonMobil Companies in Nigeria, Mr. Nolan O’Neal, visited his office in Uyo, Akwa Ibom State capital.

    He  said: “I thank you for the assurance that I should pass to the people of the state that the special community projects that we had negotiated and agreed upon that you finally receive leadership approval and the money is ready to start the project.

    “But what is impeding the projects is that some of the communities went to court and there are about 14 cases pending in the courts. I think it is in the interest of those communities affected to immediately withdraw those cases from courts to allow contractors be mobilised to site and commence meaningful projects in the areas.”

    He explained that if those projects are not executed as and when they should, the communities would be at the losing end, considering the bureaucratic procedure involved in getting approval for such community projects.

    Akpabio directed the Commissioners for Health, Housing and Urban Renewal, Environment, Culture and Tourism as well as Special Adviser on Labour and Productivity to work with the Secretary to the State Government in persuading the communities to withdraw the cases from courts to ensure amicable settlement within one week. This, according to him, would enable Mobil execute meaningful development projects in the communities.

    Governor Akpabio, while assuring the management of ExxonMobil that his government would ensure the withdrawal of pending court cases, extolled the symbiotic relationship between the state and the oil company. “We believe that we have a symbiotic relationship such that will outlive many administrations. We are excited, it is like renewing the cordial relationship, the fraternal relationship and business relationship that existed for decades and will exist in future as far as oil production continues to remain,” he said.

    Akpabio, who congratulated O’Neal on his elevation, described him as a square peg in a square hole. He said: “Having lived with the people, you know their pains and aspirations and you know what to do to bring smiles on the faces of the host communities.”

    O’Neal thanked the governor for the warm hospitality to ExxonMobil, describing the state as a fantastic place to do business.

  • FirstBank to fund firm’s multi-billion dollar project

    FirstBank to fund firm’s multi-billion dollar project

    First Bank Nigeria Plc is to finance the multi-billion fabrication and construction yard of Kaztec Engineering Limited, a subsidiary of Chrome Group. The project is located at the Snake Island, Lagos.

    The  bank management led by its Group Managing Director, Mr. Bisi Onasanya, toured the facility to assess the project and determine the level of finding for the company.

    First Bank’s Group Executive, Institutional Banking Group, Bashirat Odunewu,  told The Nation that the bank was impressed with some of the jobs done by Kaztec for some oil exploration and production companies.

    She said Firstbank would  finance the project, but did not state to what tune. She said the bank is financing the Chrome Group’s power firm, the Enugu Electricity Distribution Company.

    However, she couldn’t confirm whether First Bank alone will finance the Snake Island project, or whether it will be done in partnership with other banks. She only said that as the project is being done in phases, there is a ratio Kaztec has to bring and some that First Bank will fund. Sometimes, we invite some of our colleagues if we need to do syndication. Sometimes, we do it on our own. You know that for the banks, there is a certain limit set by the financial sector regulators and you cannot go beyond that for any particular customer, she added.

    On the impression of the bank after the tour, she said: “It was impressive because Kaztec is 100 per cent Nigerian company. They made presentation to us, and we had a walk round the facility. I must say that all the things we saw were very encouraging especially when a Nigerian company can do such good technical work. They showed us what they were doing presently and even those that have been concluded; a lot of engineering and technical works. These are works that are normally given to foreign companies to do in the past. Also, their client, Addax Petroleum, was satisfied with what they are doing. We are interested in what they are doing. We went to see what is on ground and how far we can support them.”

    She debunked allegation that First Bank doesn’t finance oil and gas activities. She said: “To say that First Bank is not active in the oil and gas industry is not correct. We are very much involved in the oil industry. We are actually in the fore-front of oil and gas activities. As at today, I think we are among the top three in oil and gas, but we don’t make too much noise about it. Our customers know we are the first point of contact in whatever they want to do because they know we have a lot of expertise in it. Sometimes, we work with our sister company, FBN Capital. So there is hardly any transaction you can talk about in the recent times that we are not part of.

    “Also, it is not difficult for Nigerian companies to access facilities from the banks but they need to know that first, they have to be competent, and be able to prove to the bank that they have already invested some of their own equity into the project. In the banking industry, we have what we call bankable projects, so someone doesn’t wake up to say, I want to do a yard like what Kaztec has in the Snake Island, and tells the bank to finance it. The firms have to use some of their own funds. The idea is that when you start, you have to show that you can manage funds on your own, and when the banks see what you are doing and where you are going; they will work along with you. But a lot of people don’t want to do anything on their own first; they want the banks to finance everything. But you must show your own commitment before the banks can come in to assist you. Sometimes, a group can come together to pool resources and once the banks can see how far they have gone, the banks will join them.”

    “We were already involved with Kaztec in other areas such as the electricity distribution company in Enugu. We were their banker, so we have a relationship with the company and we know what they are doing. As the banker, we have to know what they are doing, we need to know where the next good transaction is going to happen; there is no more armchair banking.”

    The Group Head, Institutional Banking Group – Energy, Mr. Olalekan Adenekan said: “The bank had last year alone, invested over $1.2billion in oil and gas. This comprises upstream- exploration and production; and midstream companies where you find Kaztec. Let me say that Kaztec is really one of the top three companies in Nigeria today and I am happy to say we are in the forefront of supporting all these companies. So in terms of investments, we are very high in the industry.”

    Chrome Group’s Business Development & Head Communications, Dr. Edwin Ndukwe, said: “The Snake Island project is being done in phases, phases 1-4. Phase 1 is the fabrication yard, while Phase 2 is the pipe rolling and pipe coating yard. Phase 3 is the drydock yard, where we will be doing the refurbishing and rehabilitation works for boats, tug boat, barges and other marine vessels. The Phase 4 is the logistics base. Right now we are still in the Phase 1. We are anticipating the end of this year for the completion of phase 1. There is work ongoing at the moment, which is establishing the concrete yard, the workshops, the blasting and paint shops, which are all under construction now. By next year, we will be moving into the pipe laying and pipe coating stage.”

  • Motorists accuse fuel attendants of fraud

    Motorists accuse fuel attendants of fraud

    • DPR: we’ve received several complaints

    Motorists are protesting what they called sharp practices by attendants at filling stations. Many filling stations use under-dispensing fuel pumps that do not record accurate sales information.

    The  Department of Petroleum Resources (DPR) said it had received complaints from many motorists.

    The Nation gathered that many of the fuel pumps do not present accurate readings, making it easier for petrol stations to short change their customers.  A visit to some petrol stations in Iyana- Ipaja, Ikotun, Ikeja, Oshodi, Ketu, Ikorodu and Ebute-Metta in the Lagos metropolis gave confirmed this assertion.  It was further gathered that the distortions of the readings of the meters were mostly done by petrol attendants, albeit with instructions from their managers.

    A petrol station manager, who does not want his name in print, said that the issue is disturbing because customers have lost confidence in the filling stations that commit such crimes.The sources said the perpetrators operate like a chain, adding that many people were involved in the issue.

    “From my experience in the industry, I know that a lot of workers were used to short-change customers.  There is a top-down approach to the issue. Senior and junior members of staff in the petrol stations are involved in the crime. It is wrong to conclude that only the junior workers short-change customers.  No petrol attendant has the courage to open meters and adjust them without the express permission of his or her manager.  People who perpetrate such evils make a lot of money. Many petrol attendants have two cars or more. The question is: Where did they get the money to buy those cars?” The source asked how many attendants earn N20,000 monthly?  The older ones do not collect more than N13,000 per month, he said.

    A lawyer, Ponle Olurotimi, said many people have fallen victims to this sharp practice at fuel stations. Olurotimi said she has been inundated with reports of people that were duped by filling stations. I have heard motorists, housewives, and other users of petroleum products complain about the issue, she said.

    She said: “The issue of short-changing customers cuts across the three petroleum products namely diesel, kerosene and petrol.  The transporters, women and other household users of petroleum products have been cheated in the past.  For instance, many have said that they got 15 litres of petrol, instead of 20 litres they paid for.”

    An Executive Director, African Centre for Media and Information Literacy, Lewis Asubiojo, said some petrol stations in Abuja are fond of under-dispensing products to customers. Asubiojo said he has once reported a petrol attendant to his station manager for not dispensing the right volume to him.

    He said: “I have been short-changed by filling stations owned by independent oil marketing companies. Many of my friends said they do not want to fall victims again, and have resorted to buying fuels from petrol stations that belong to major marketers and the Nigerian National Petroleum Corporation (NNPC) to ensure accurate volume delivery. The NNPC and major marketers have something at stake. They invest billions of naira into the business and would not do anything that will tarnish their reputations.”

    However, the Director, Department of Petroleum Resources (DPR), George Osahon, said the agency will move against any petrol station found short-changing its customer. Osahon said the DPR has received complaints on the issue via short messages and e-mails. He said that DPR is ready to act on useful information that can lead to discovery of filling stations engaging in such practices.

    “DPR has received several complaints on the issue of retail outlets under-dispensing products to their customers.  Just as it is not possible for the police to be everywhere at the same time, so it is with officials of DPR. We have told the public to come out with information on any station short-changing its customers for necessary action,” he added.

  • Shortage of pre-paid metres hits distribution firms

    The distribution companies (DISCos) unbundled from the Power Holding Company of Nigeria (PHCN) have been hit by shortage of prepaid meters.

    The privatisation of the successor companies, including the generation companies (GENCos), was done, among others, to improve electricity supply since their coming about a year ago,  this expectation has not been met.

    Officials of Ikeja and Eko Electricity Distribution Companies (IKEDC and EKEDC) told The Nation that  both firms do not have prepaid meters. Besides, there is a backlog of customers who have paid and have been awaiting collection months.

    “I will confirm to you as a friend that we do not have prepaid meters at the moment. But you cannot tell customers that we have exhausted our stock.The Federal Government has stopped importation and sale of prepaid meters presently. Therefore, we only make efforts to see if we can deliver to customers that have already paid but for customers that are making fresh purchase, we cannot guarantee that now. The fact is that sale of prepaid meters has been suspended until further notice,” the sources said.

    With the scarcity of prepaid meters, the application of estimated billing for electricity consumers, might likely increase. The prepaid metering system was introduced to reduce or eliminate estimated billing system because customers complain of being given outrageous bills. The prepaid metering enables a customer to plan his or her consumption according to affordability.

    Customers, who spoke to The Nation at Somolu, Ikorodu, Island Business Units, among others, said they had been at the offices for several times, though they had paid for the metres, they were unable get them. Others said they had money on them but couldn’t pay as the power firms said there were no meters.

    The new investors have been complaining about poor revenue collection from customers, which is below their projections on takeover of the assets in November, last year. To improve revenue generation, the DISCos are exploring alternative sources of power supply, especially through embedded and captive power generation.

  • Kwankwaso, NERC, TCN chiefs for WorldStage confab

    KANO State Rabiu Musa Kwankwaso, Chairman, Nigerian Electricity Regulatory Commission (NERC), c, and Managing Director of Transmission Company of Nigeria (TCN), Mr. Mack Kast, among others, have confirmed participation in the fourth WorldStage National Electricity Power Conference.

    According to the organisers of the conference, the event has been rescheduled to hold on October 23, from the September date earlier announced. But the venue remains Lagoon Restaurant, Victoria Island, Lagos. The date was shifted to accommodate more requests for participation.

    The event will be chaired by President of Lagos Chamber of Commerce and Industry (LCCL), Alhaji Aderemi Ismaila Bello; Amadi is expected to deliver a paper titled: ‘Commitment of NERC towards regulation and effective consumer’s right on electricity supply chain’  and the TCN boss will speak on ‘TCN: Meeting the electricity transmission capacity for Nigeria post-privatisation.’

    Governor Kwankwaso, whose state has achieved commendable progress in power generation through independent power projects (IPPs) for economic development, will share his experience with participants at the forum.

    The President/Chief Executive Officer, World Stage Limited, Mr. Segun Adeleye, said with about 30 million households in Nigeria still without access to electricity even liberalised electricity power sector, it is crucial for stakeholders to meet to address the challenges facing the power sector.

    He said: “The challenges that surfaced with the new dispensation are numerous but not un-surmountable.” He listed these to include the rising activities of vandals who burst gas pipelines and other power transmission equipment; high level of power theft and meter bypassing; gas supply limitation; revenue collection; transmission wheeling capacity; funding model for transmission; expected declaration of Transition Electricity Market; lack of accurate data on power demand of the entire country; non-alignment of the entire value chain of power generation, transmission and distribution; security of investment; right pricing and efficient usage of available electricity; paucity of fund for transmission facility upgrade and replacement of aging 132KV lines.

    “As banks invested about N750 billion in the power sector since its privatisation, it’s imperative that the security of this huge exposure rests squarely on stakeholders to ensure success of the privatisation process,” he said.

  • Shippers set access to gas pipeline

    •Constitutes committee to explore possibilities

    The West African Gas Pipeline Company (WAGPCo) has opened its pipeline to be accessed by independent gas shippers to maximise the potential of the facility, which  has been underused over the years.

    Its General Manager, Corporate Affairs, Mrs. Harriet Wereko-Brobby, said the management decided to open the facility so that there should be additional gas to fill it.

    Data show that the capacity of the pipeline is 474 million standard cubic feet of gas (mmscf) but the contractual volume signed with the foundation customers is 134mmscf, which is about 170 million British thermal unit Btu. British thermal unit is used to measure the energy of gas, that is, the caloric value (heat content), while the volume of gas is measured in standard cubic feet.

    She said what the company wants to achieve by opening access to the asset is to put into use a substantial part of the unused capacity. The data obtained by The Nation, shows that even if the entire foundation customers’ volume of 134mmscf is fully utilised, there is still 340mmscf unused capacity. Therefore, by opening access to the pipeline, the company tries to encourage independent gas shippers to buy gas directly from producers, that is, oil companies in Nigeria such as Shell, Chevron, Seplat, Total, among others, after which WAGPCo will transport the gas to the shipper’s destination in Togo, Benin Republic and Ghana.

    However, such shippers, according to WAGPCo, will be registered and licensed, and must meet all the necessary requirements and standards needed by the regulator, West African Gas Pipeline Authority (WAGPA).

    WAPA regulates WAGPCo as the Department of Petroleum Resources (DPR) regulates the Nigerian oil and gas industry, so before WAGPCo moves gas for a shipper, the shipper must have a licence, have the gas, demonstrate ability to meet specification, and ensures meeting all the requirements.

    Mrs Wereko-Brobby said: “What we have been doing is encouraging and working with our stakeholders, that is, those for whom we transport gas to enter into arrangement with the producers of that gas so that we would be able to fill our pipeline. Some of them in Ghana, Togo and Benin Republic, have started engaging with gas producers in Nigeria trying to get contract memoranda of understanding so that they would be able to get additional gas to fill our pipeline.

    “At the same time we are continuing our engagement with those protecting our pipeline. We have had two forums; we brought together the stakeholders, subject matter experts from different organisations, naval forces, maritime and ports authorities from different countries. They all came together, sat down and talked about what can be done and how to protect the pipeline. And they also indicated their interest in protecting the workers giving instances of pirates that are not only dangerous to WAGPCo but also all the companies that have formations in the sea. So in the sub-region and even on the ECOWAS’ level, they have assured that it is a matter of highest priority to protect the pipeline and all the nations are collaborating to do that.

    “We brought them together so that we can discuss not only the physical protection but any technological advancement that we can take advantage of.  The success of WAGPCo is very important to ECOWAS. What they feel is that if WAGPCo succeeds, that means all other efforts for regional integration can succeed, so they are very interested in WAGPCo success as a way of making sure that we will have a framework for regional integration programme.

    “We also have a committee set up right now that will set forward the programme. The committee will try and come up with different methods of protecting the pipeline and also ensuring the reliability.

    “The committee is now developing its terms of reference and the expectation is that the terms of reference will be prepared by next month. Once members of the committee come up with their terms of reference, which will be within the next six months to one year, they should have come up with a plan, which will be commenced immediately after. Some of the actions that were identified at that forum such as physical patrol have been started.”