The Nation Newspaper

Category: Energy

  • ‘Gas’ll enhance Nigeria’s global relevance

    Nigeria must harness its gas-to-power resource to  attain global relevance in energy sufficiency and accelerated growth, the Chief Technical Officer of Seven Energy, an indigenous oil and gas company, Campbell Airlie, has said.

    He spoke at a forum titled: The changing global energy supply balance and Africa’s economic transformation at the just-concluded 38th Nigeria Annual International Conference and Exhibition (NAICE) of the Society of Petroleum Engineers (SPE).

    He said for Nigeria to achieve its economic goals, it should focus on accelerated development of gas-to-power initiatives because stable power is a catalyst for the growth of every sector of the economy.

    Airlie said in addition to investing more in developing the gas resource, Nigeria needed to improve the skills of indigenous manpower.

    “Nigeria has some of the best gas reservoirs in the world, but what we need now is not just the best technology but good skilled hands to manage the technology. That is why I am very pleased with Nigeria’s transformative thinking in the area of gas development,” he dded.

    He said Seven Energy remained at the forefront of developing gas resources with several investment initiatives According to him, Seven Energy and its wholly owned subsidiary, Accugas, has closed $170 million medium-term acquisition financing with FirstBank of Nigeria (FBN) UK Limited and Ecobank Nigeria Limited to part-finance the acquisition of East Horizon Gas Company Limited.

    Airlie also said the company had continued to invest in the development of the Nigerian workforce to support its growing investment in gas. He said Seven Energy was proud to support NAICE as a demonstration of its commitment to the development of the industry.

    The panel of discussants included the Group Coordinator, Corporate Planning and Strategy, Nigerian National Petroleum Corporation (NNPC), Dr. Tim Okon who represented the Group Managing Director, Joseph Dawha; Commissioner for Energy and Mineral Resources, Lagos State, Taofiq Ajibade Tijani and Chairman, SPE Nigeria Council, Bernard Oboarekpe, among others.

    The NAICE conference with the theme “Africa’s energy corridor; opportunities for oil and gas value maximisation through integration and global approach” attracted hundreds of participants across the industry value chain.

  • NAPTIN, power firms collaborate on workforce development

    The National Power Training Institute of Nigeria (NAPTIN) is partnering generation and distribution firms and some state governments to address the dearth of qualified personnel for power equipment and facilities.

    The induction of young graduate engineers recruited by the Ikeja Electricity Distribution Company (IKEDC) and the Taraba State Government, took place in Lagos, to kick start their one-year training.

    NAPTIN’s Director-General Reuben Okeke told The Nation that the recruitment and training became imperative because there had not been any in the sector in the past two decades, adding that apart from the huge deficit of technical workforce, most of the workers were aged, a development he described as a threat to the sector.

    Okeke said: “This is NAPTIN programme. The Sahara Group, the owners of IKEDC and Egbin power station recruited about 110 engineers and the Taraba State Government recruited about 50 engineers  and brought them to NAPTIN to undergo one year graduate skill development programme, which was started since 2012 to build capacity in the power sector.

    “IKEDC and Sahara Group in particular wanted us to train the young engineers they have recruited and, today, we kicked off the programme. It will ensure that the huge investment that Mr. President is making in the power sector receives a matching competent workforce that would be able to manage and operate these equipment and facilities in the power sector when they are commissioned.

    “Some of the equipment and facilities have been inaugurated but we lack the human capital and competent workforce to man them. Sahara Group has recruited a large number of engineers and is about to recruit linesmen and artisans, which they will bring to NAPTIN for training.

    “The Taraba engineers will be trained in NAPTIN training centre in Jos, Plateau State. The engineers after leaving school with B.Sc. or HND still need to acquire one year development skill acquisition where they do applied engineering and hand-on-training on light equipment.”

    On how the training will translate to power supply improvement, Okeke said: “What a competent workforce can do in an industry such as power is huge. If you don’t have a well-trained skilled staff, the improvement we are witnessing will not be there. Without a competent hand, there is no way the facilities that will improve the power sector will be operated.

    “We graduated 243 in 2013 and we have about 500 undergoing the programme. This is important because for over 20 years, there has not been training in the power sector and without training in any endeavour, you cannot get what owners of that business want and that is the reason private sector doesn’t joke with training.

    “So, what we are doing in NAPTIN is the mandate of the Federal Government to ensure that we provide a competent workforce that will operate the infrastructure. The engineers undergoing the training are already employed because we have quite dearth of technical workforce in the power sector, the engineers, linesmen, cable joint workers are not there and those ones that are there are aged.

    “We don’t have people that will fill in that gap. Those who graduated from NAPTIN will be beautiful brides because the regulator is insisting that before you import any skill you have to get a ‘No Objection’ from them; besides, universities and polytechnics are turning out electrical and mechanical engineers every year.”

    On technology, tools and personnel to train the engineers, Okeke said the institute was partnering some organisations to address such problems to ensure that the engineers get world standard training.

    He said: “We have development partners that are helping us both in training the trainer as well as training the candidates. The Federal Government has approved substantial amount of money even though not enough for us to acquire the training aids and equipment. We have partnership with National Power Training Institute of India, General Electric, which we are about to sign; we have already signed memorandum of understanding (MoU) with Schneider; we have the support of French Development Agency; and the World Bank has given us some facilities, in which we have some foreign experts who come to help us review our curriculum and bring it up to date. We have a lot of partners and trainers that will train these people.”

  • Fed Govt, GE partner on refineries’ future

    General Electric (GE) is discussing with the Federal Government on how to provide applications that would enhance the operations of the refineries, its Chief Operating Officer in West Africa, Uzochi Nwagwu has said.

    He said this while unveiling the company’s plan for the industry. He said at the end, a strategy on how to improve the refineries’ capacity would be announced.

    He said the company also planned to invest $1 billion in the industry over the next five years.

    Nwagwu said $250 million of the amount would be spent on infrastructure and development of its facility in Onne, Rivers State, while the balance would be for maintenance of operations.

    He said: “We will continue to operate in Nigeria irrespective of challenges facing the country.  That is why we are committing a lot of money to our operations as well as trying to help the energy sector by deploying solutions that would meet its needs.

    “The company is having a broad-based discussion with the Federal Government on the issue of helping improve the capacity of the refineries.  We are looking at the basic components we can bring into the refineries. This may not necessarily address the entire problems facing the refineries; however, we are having discussions to see how we can help in solving some of the problems.”

    According to him, the company is not new in oil and gas business as many have been made to understand.

    “Our interest in oil and gas is more than a decade, though our core areas are power, health and transportation sectors. The need to tap into the huge opportunities in the oil and gas informed the decisions now. As regards oil and gas, we have substantive infrastructure in place to meet the needs of the operators,” he added.

    He said the fiscal regime is not friendly to both the International Oil Companies (IOCs) and the local operators. “We see Nigeria as a country with 170million population; a country where there are challenges in the areas of hydrocarbon, power, healthcare, and transportation. In those challenges, we observe that there are immense opportunities for General Electric to play its roles as a global energy solution provider.

    “With respect to fiscal regime, we do hope that the climate would change for better because we provide services to IOCs, and national oil companies. We would like to see an investment-driven climate for the good of operators,” he added.

  • ‘Privatised power sector will reposition gas’

    The private sector-driven power firms will help in taking gas higher height, the President, Nigeria Gas Association (NGA), Saidu Mohammed, has said.

    Mohammed while speaking at a stakeholders’ meeting in Lagos, said the companies would propel the utilisation of the abundant natural gas and further ensure its place as the core factor in resolving the perennial power problems.

    He was of the view that gas has received increased interest in the last past years as a result of the development of the power sector.

    He said: “With at least 70 per cent of Nigeria’s power generation facilities being gas-fired, the demand for gas for this new market is set to put gas in the rightful place as the core driver in the efforts to bridge the power supply deficit in Nigeria.

    “The obvious problems facing the gas industry is how to ensure greater penetration of the product into  various parts of the country and to sustain gas usage in such a way that it would displace other fuels in the energy mix.”

    He said the challenge in the coming years would centre around how to find, develop, process, transport and distribute sufficient gas to the power sector and other sectors that use the product for their production.

  • BPE, bidders meet on assets sales

    BPE, bidders meet on assets sales

    The Bureau of Public Enterprise (BPE) has met with the preferred bidders for seven of the 10 National Independent Power Plants (NIPPs) to ensure  a smooth exercise,  its Director-General, Benjamin Dikki, has said.

    He said the Abuja meeting became imperative for BPE and the investors to look at issues vital to the plants’ sale.

    The issues were  shares purchase agreement (SPA), performance agreement and shareholders agreement, among others.

    The forum, Dikki said, was also an opportunity for BPE and the firms to look at the terms   governing sale and purchase of the plants.

    The National Council on Privatisation (NCP)  chaired by Vice President Namadi Sambo, approved the sale of the seven plants, following successful financial bids opening last March.

    At the meeting were EMA Consortium which is hiding for (Benin Generation Company and Calabar Generation Company), Dozzy Integrated Power (Egbema Power Generation Company),  Seoul Electric Power Limited (Geregu Generation Company), ENL Consortium Limited (Olorunsogo Generation Company), and Omotoso Electric Power (Omotoso Power Generation Company).

    Alaoji, Omoku  and Gbarain  power plants’ prospective buyers were not represented at the meeting because of of litigation.

    Dikki said the court has restrained the government from selling the three plants.

    According to him, the sale of the 10 plants is on course,  adding that no problem would be  allowed to hinder the privatisation.

    Dikki said: “The government has slated 10 power plants for privatisation, but a company went to court to stop the sale of three of the plants. The government believes in the rule of law and has gone to court to reverse the injunction in order to privatise the plants soon.

    “The seven firms have submitted the preferred bidders guaranteed forms. Based on this, they are qualified to discuss the sales’ document with BPE. The document contains the Shares Purchase Agreement, the Performance Agreement and the Shareholders Agreement, which have been discussed at the meeting. The meeting was called to negotiate and agree on the document.

    “Once agreement is reached on the document, it would be executed. From the day of execution, the preferred bidders are obligated to pay 25 per cent of the bids’ price within a particular period of time. Thereafter, they would be given six months to pay the balance.  They have the option to pay early and take over the plants. That is where we are on the privatisation of the plants.”

    The spokesman of NDPHC, Yakubu Lawal, said he was aware that BPE and the seven preferred bidders had a meeting. He said the meeting was organised to finalise the sales and purchase deal.

    He said: “The meeting was organised to examine issues relating to Shares Purchase Agreement, Shareholders Agreement and others that need to be signed in order to achieve the privatisation goals. I think the two parties need to go through the agreements to arrive at a consensus on the issue of selling the plants.”

    The 10 midsized power plants built under the NIPP Plants, which are supervised by the Niger Delta Power Holding Company (NPHDC) are expected to generate combined 5,000 megawatts (MW) of electricity.

  • SMEs to invest in solar energy

    To boost the renewable energy policy of the Federal Government and reduce dependence on the national grid, all the Small and Medium Scale Enterprises (SMEs)  in the country are planning to invest in solar energy.

    The policy was introduced to increase accessibility to power via production of solar, wind, biomass and other forms of renewable energy.

    Introduced as part of the power  reforms, the policy is aimed at boosting electricity supply in the country.

    The Director, Membership Services/ Spokesman, Nigerian Association of Small and Medium Enterprises (NASME), Nerus Ekezie, told The Nation that the association is planning to set up a body on renewable energy before December, this year.

    He said the body would serve as a platform for the 17.5 million registered SMEs in Nigeria, adding that they manufacture products and render services to the public.

    He said: ‘’Plans are underway to form a body on renewable energy by December to increase SME operations.  Specifically, we are trying to invest in solar because of its reliability. Biomass and wind energy are quite new in Nigeria, and we do not want to go into it now. Through solar, we hope to cut the cost of production.  Research shows that 40 per cent of the cost of production in the manufacturing sector goes to power. This is one of the  factors that led to the closure of many companies.”

    He listed other factors as financial and succession problems, occasioned by the death of the owners of the companies.  ‘’Many firms have closed, while others are on the verge of collapse. This makes it difficult to know the number of SMEs that have closed shops,’’ he added.

    He said the United Nations Development Project (UNDP) was promoting renewable energy in Nigeria and beyond, stressing that UNDP has promised to support the association.

    Ekezie said the use of renewable energy is optional, noting that operators are allowed to use methods best suitable to them.

    ‘’We cannot force SME operators to use renewable energy. We can only appeal to them on the issue. Our appeal to them is premised on the fact that renewable energy offers value. It is environmental friendly, clean,  and reliable  There is no combustion,  implying that users are free from dangers,’’ he said.

  • IKEDC unveils online bill payment platform

    THE Ikeja Electricity Distribution Company (IKEDC) and the Nigeria Inter-Bank Settlement Systems Plc (NIBSS) have created an online platform to facilitate payment for post-paid customers in both energy and non-energy-related bills.

    NIBSS is central switch for interconnectivity & interoperability of payment schemes. The new regime would ensure that post-paid customer accounts are credited promptly.

    The  platform,  which  took off  last Friday,   according to  IKEDC’s Head,   Communication and  Strategy, Pekun Adeyanju, is available via the following: IKEDC website (http://webpay.ikedc.com/pay) who those using credit and debit cards; Internet Banking portals of financial institutions with  NIBSS e-BillsPay platform, and banks in Lagos State.

    The Chief Executive Officer, IKEDC, Mr. Abiodun Ajifowobaje, said the initiative represents another milestone for the company as it continues to enhance customer experience within its network.

    “This upgrade of our electronic bill payment process has been designed to deliver a more convenient, efficient and seamless experience for customers whilst paying their IKEDC bills. We urge all our esteemed customers to embrace the platform as we continue to work on ensuring enhanced power supply to our customers,” he said.

    He added that customers that encounter challenges should contact IKEDC contact centre on 0800-2255-45332 or 0700-2255-4532 or send an email to: customercare@ikedc.com.

    The IKEDC boss said customers can also visit the company’s website (www.ikedc.com) for more information on steps for payment online and in bank branches in Lagos.

  • ‘No plan to stop fixed tariff’

    The Nigerian Electricity Regulatory Commission (NERC) will not reverse the payment of fixed tariff by customers, its  Chairman Dr Sam Amadi, has said.

    Last May 1, NERC ordered the Electricity Distribution NERC Companies (DISCOs) to stop collecting N750 monthly fixed charge in any area without power supply for 15 days in a month.

    The directive was given to make the DISCOs more responsive to the plight of consumers and ensure that the comission is fair.

    The order followed complaints from the DISCOs, which complained that it was affecting their revenue.

    Amadi told The Nation that NERC was working on issues, such as Transitional Electricity Market (TEM), fixed charge policy, among others, which are crucial to the growth of the sector.

    He said: “There is no timeline as regards the reversal of the directive on fixed charge policy. We are still working on modalities to ensure that various policies achieve their desired objectives.  After the declaration of the Transitional Electricity Market, we would tell the public our position on the issue.”

    But a top official of the Ikeja Electricity Distribution Company (IKEDC) told The Nation in confidence that he was not aware of any decision by NERC to reverse the directive on fixed charge policy. The source said IKEDC had never complained that the directive was affecting its operations.

    “To the best of my knowledge, I’m not aware that NERC is planning to reverse the directive stopping DISCOs from collecting N750 monthly fixed charge in areas without electricity for 15 days,’’ he said.

  • How oil theft law can be effective

    Plans to enact fresh law against energy theft will be effective when the  government shows “strong commitment’’,  stakeholders have said.

    The Federal Government through the Office of Attorney- General of the Federation is scrutinising a bill that would provide  legal framework for companies to operate in the oil and gas sector and collect their revenues without hindrance. The bill, when passed into law by the National Assembly would help check crude oil theft, pipeline vandalism and other activities in the industry.

    The President, International Association of Energy Economics (IAEE) Nigerian Chapter, Prof Adeola Akinnisiju and President, Petroleum Technology Association of Nigeria (PETAN), Emeka Ene, said implementation is key to the success of any law.

    Akinnisiju said it does not make sense to make laws that would not be implemented.  He said laws made in the past are not well implemented, giving the criminal activities in the industry.

    He said: “The issue of providing new law against oil theft among other incidents is a good one.  It is one thing for the government to enact a law that would help both local and International Oil Companies (IOCs) operate well, it is another thing to implement the law. I hope the law would not be one of those that are not executed in Nigeria.

    “If the law is implemented, it would curb crimes in the industry. It would send signal to the perpetrators of evil. They would know that it is not business as usual.  They would weigh the cost of committing the crime, and once they know that the consequences are grave, they would stop.”

    Ene said stiffer regulation is required to make the sector more vibrant and rewarding to operators irrespective of the areas they operate. He said the industry has lost heavily to oil theft, urging the government to fully implement laws to encourage industry’s growth.

  • Govt plans new gas price for Gencos, others

    Govt plans new gas price for Gencos, others

    The Federal Government is planning what it calls a “competative gas price” for the benefit of power generation companies (Gencons), petro-chemical and fertiliser plants.

    The proposed price regime may be introduced before September, according to the Chief Executive Officer, Nigerian Electricity Regulatory Commission (NERC), Dr Sam Amadi.

    It is to encourage producers that have been clamouring for incentives to increase output.

    At present, there are varying price regimes. While the gas-based industries pay 90 cents per 1,000 standard cubic feet (SCF)  of gas, the power firms pay $1 per 1,000 cubit feet.

    When benchmarked against international rates, the prices are considered inadequate to encourage local firms to produce for domestic use. The proposed price regime is expected to bring the local price nearly at par with the international market rates.

    Amadi told The Nation that the Ministry of Power, NERC and other relevant stakeholders were working to ensure that the price comes out in September, adding that the price will precede the declaration of the Transitional Electricity Market also slated for  September.

    He said: ‘’The domestic gas price ranges from $1 to $2. We are still working on the issue to ensure that gas producers are incentivised  and produce more for the sector. Power is critical to the growth of the economy and we want to see a situation whereby the electricity companies would be able to produce optimally.

    “The declaration of the Transitional Electricity Market is slated for September. We hope to get the new gas price regime on ground before that date because of its importance to the energy sector.’’

    The  domestic gas users know how important the new gas regime is to their operations, and as such, would embrace it, he said, adding that the Commission has no doubt that companies in the oil and gas sector would comply with the policy.

    To the Director-General, Bureau of Public Enterprises (BPE) Benjamen Dikki, investment in gas is not attractive to foreign firms.

    He said  prices of gas in the domestic market were lower compared to  the international markets.

    ‘’While the domestic gas price is between $1 and $2, the international market price ranged from $5 to $6.  Foreign firms are not ready to invest in gas production in Nigeria because they would not be able to get good returns.

    ‘’Once there is a cost reflective price for our gas, we would see a lot of investments going into that area. The gas challenges we are facing would be taken care of in long-term, once all the variables that determine the cost of producing gas are taken into consideration.  The cost of mining, drilling, production  and piping gas should be well considered, ‘’ he said.

    He admitted that gas is a problem, noting that it has affected power generation.  He said power distribution firms should not be blamed for the problems in the industry.

    ‘’The distribution companies are not to blame. The generation companies generate electricity and supply to the DISCOs. The GENCOs do not have gas to generate. Once the GENCOs do not have power to generate and no power to give to the DISCOs,  the DISCOs would not have anything to distribute. None of the distribution companies generate power. It is the generation companies that generate power,‘’ he added.