The Nation Newspaper

Category: Energy

  • Nipco, others to participate in downstream expo

    Nipco, others to participate in downstream expo

    Nipco Plc, Conoil Plc, among other marketers, have agreed to participate at the seventh edition of Oil Trading and Logistics Africa Downstream Expo in Lagos this thursday. The programme will host key players in the industry in Nigeria and beyond.

    Nipco, in a statement, said the exhibition has become one of the Africa’s prominent forum for trade, knowledge and networking in the region’s downstream petroleum market.

    The company said the forum would be used to promote its products across value chain, as well as unfolding its marketing strategies for growth.

    ‘’ The exhibition will help us in promoting our on-going plans to make petroleum products gets to the consumer doorsteps through the acquisition of retail outlets in strategic locations across the country in two separate schemes. The schemes are: Dealer Owned-Dealer Operated (DODO) which are on long lease and the Company Owned-Dealer Operated (CODO) which is an outright lease. In all the schemes, concerted efforts are being made to ensure that the company’s stations operate in conformity with industry standards and sophistication,’’

    The company said it has a joint venture project with Nigerian Gas Company (NGC) to promote the use of Compressed Natural Gas (CNG) as a vehicular fuel. The scheme, it said, has attracted thousands of auto users in Benin, among other cities in the country.

  • Electricity: firms promise better days

    Electricity: firms promise better days

    The days when government agencies, ministries, parastatals and other power consumers, such as the police and the armed forces, owed electricity bills will soon be gone.

    The electricity distribution companies (DISCOs) have said that their priority on taking over the firms is to ensure that the outfits pay their electricity bills.

    They also pledged to capture customers within the value chain, solve metering problems, provide parameters for paying bills and introduce a flexible payment structure.

    According to Daniel Muller, Michael Tarney and Uade Ahimie who spoke in separate interviews in Lagos, meeting the targets is imperative to the growth of the sector.

    Muller, a transaction adviser of West Power & Gas Limited (owner of Eko Electricity Distribution Company), said the firm would make meters available to consumers under its jurisdiction when it starts operation. He said many customers did not have meters, making them to pay in excess of what they consume.

    Muller said: ‘’Half of our customers do not have meters. One of our goals is to provide meters to consumers. This would be done in an organised manner to prevent confusion. We are going to employ neighbourhood approach of distributing meters. By this, we would move from one neighbour to another to ensure that everybody is covered.’’

    He promised efficient distribution of electricity to consumers, adding that it is the core function of every distribution company. He said the firm did not have control over electricity generation, and would do its best to meet the yearnings of consumers.

    Ahmie, a Business Process Re-engineering Manager, NEDC/KEPCO, owner of Ikeja Electricity Distribution Company, said overcoming the problem of lack of meters was one of the goals of the company.

    Ahmie said Ikeja consumes a huge volume of electricity because of its commercial nature and it must have regular electricity supply to boost the economy.

    ‘’Managing the collection of bill is another area we are looking at. Under the Power Holding Company of Nigeria (PHCN), it was a problem collecting and managing bills. To avoid past mistakes, we intend to provide highly innovative and corrupt-free method of collecting bills. We are going to look at customers’ metrics to ensure that they are captured in the value chain,” he added.

    He said consumers would be educated on how energy is distributed and regulated within the houses and offices to reduce consumption and the importance of paying bills to the right people.

    According to him, Ikeja and Eko Electricity Distribution Companies would reduce their cash collection centres and advise customers on how to use payment channels, such as the Automated Teller Machines (ATMs) and Over-the-Counter (OTC) payment among others.

    Tarney, a director at KANN Utilities, the firm in charge of Abuja, Nasarawa and its environs, said government had defaulted in paying for utilities. He said government institutions consume more electricity and were required to pay higher bils.

    He said: “As distribution companies (DISCOs) are starting operations soon, they would like to generate enough tarrifs to meet up their needs. DISCOs know that they can generate enough money from the government. They would like to rewrite history by making government to pay for utilities. Government agencies have a penchant for not paying their bills as at when due. They are adequately paid as evident by their budgetary allocations. If the government does not pay for the electricity it consumes, there is a problem. Everybody must be made to pay for energy. The issue of government institutions not paying their bills as at when due would no longer be tolerated.’’

    According to him, the objectives of the power sector reforms would be defeated if electricity distribution is not improved. He said the firms were would provide facilities to ensure even distribution of electricity and make consumers get value for their money.

    ‘’One thing that the 10 DISCOs have agreed to do is provide customers’ satisfaction. Once the power generation companies are able to add to the electricity megawatts (Mw), the distribution firms are obliged to supply power effectively to the customers. We believe that is the only way of gaining the confidence of the customers and further make them to pay their bills,’’ he added.

  • Hope rises as Geregu boosts power supply

    Hope rises as Geregu boosts power supply

    The inauguration of the Phase II-434 megawatts Geregu appears to have raised the hope of improved electricity supply, reports JOHN OFIKHENUA.

    With the inauguration of the 434 megawatts (mw) of electricity from the Phase II of the Geregu Power Plant, there is hope for improved power supply soon. Also, the Federal Government has said it would make good its promise to change the electricity equation on the national grid.

    The plant was inaugaurated last week by President Goodluck Jonathan in Geregu, Ajaokuta Local Government Area, Kogi State. Stressing that Nigeria must tackle its electricity challenges if it wants to become an industrialised nation, he said the remaining nine plants would be inaugurated next June.

    “If Nigeria must be industrialised, we must fix power,” he said.

    He said the plant is one of those under the National Integrated Power Projects (NIPPs) that are jointly owned by the three tiers of government. He said others would be handed over to private investors next year.

    The decision to implement the NIPPs that would upon completion add 5,000mw to national generation capacity, according to him, is an indication of government’s efforts at providing regular electricity supply to its citizenry.

    He advised the three tiers of government to own shares in the NIPPs, given the resolution of a suit instituted against it by the Revenue Mobilisation Allocation and Fiscal Commission.

    Expressing optimism on how the project could turn around the electricity sector and have a multiplier effect on the country’s economy , Jonathan said: “I am confident that in the very near future, the present epileptic power situation which is a stumbling block to the rapid growth of our economy will give way to reasonable improvement in terms of electricity delivery and other services.”

    He said at the conception of the project, the government seemed to have ignored gas supply plan for it but the Nigerian National Petroleum Corporation (NNPC) has now put an emergency gas supply plan in place to remedy the situation.

    As a major factor in power generation, gas supply affects virtually all the decisions on power. For instance, gas pricing is a determinant for reviewing the electricity tariff. Consequent upon this, the Federal Government has entered into a gas purchase agreement with the vendors to ensure steady supply to thermal plants. Aside having a reserve of 187trillion metric cubic feet of gas, Nigeria has made provision for the domestic market 1.500 million cubic feet per day.

    But power sector analysts have raised issues on the ineffieciencies in the gas supply chain, which they fear may cripple the operations of the power plants. But on the Geregu 11 Plant, the Managing Director, Niger Delta Power Holding Company (NDPHC), Mr James Olotu, said apart from the abundant natural gas, gas turbine power plants are easily constructed and best suited for the emergency intervention in power generation as conceived by the government.

    He said gas for the power station will come from Oben-Ajaokuta gas pipeline. He noted that the Nigerian Gas Company (NGC’s) facility built for Phase 1 has gas pressure reduction and metering station (GPRMS) capable of supplying additional gas requirements to Phase 11 plant. He said some modifications for separate metering trains for the gas sale lines for the two connected power plants were being done at the GPRMS by Messrs Zakhem Ltd.

    He said: ”The Geregu Phase 11 power station project was initiated in 2006 as the second phase development to the existing 414 mw Geregu Phase 1 power station to add three more Siemen type V94.2 gas turbines to complete the Geregu power station as originally conceived. However, as the project was to be funded under the NIPP with a different ownership structure from first phase plant, the Phase 11 power plant therefore was built as a fully independent stand-alone plant.”

    Olotu said Jonathan would inaugurate the Omotosho Power Plant later this month.

    He said the generation component of NIPP was conceived as a complete gas-to-power package that would harness the natural gas reserves in the Niger Delta to produce the much-needed electricity for economic growth.

    On NIPPs, Minister of Power Prof Chinedu Nebo said the country was already harnessing 1,600 mw to the national grid regularly.

    He said more units of the generation companies which the Federal Government has privatised were being overhauled “with a view to achieving a robust generation profile for the country. It is very clear that better days are ahead.”

    The minister noted that NIPPs has altered the electricity equation of the grid system.

    He said:“Today, NIPPs has, indeed, changed the power equation of the grid system.”

  • Shell, communities disagree on compensation

    Shell, communities disagree on compensation

    Controversy has continued to trail the compensation agreement between the Shell Petroleum Development Company (SPDC) and some oil ravaged communities in the Niger Delta.

    Shell, through its spokesman, Precious Okolobo, said it would only pay lawful compensation to communities affected by oil spillage in Rivers State. The company would be fair in paying damages to communities that have suffered environmental degradation as a result of oil spillage, he said.

    He said the company has not been able to provide compensation to members of the Bodo community because the matter is in court.

    “Be informed that Bodo oil spill is the subject of court suits in Nigeria and the United Kingdom, and as much as SPDC desires to pay fair and lawful compensation, we can only begin to do so when the court proceedings are over.”

    But the affected communities, Bodo, K dere, Goi and Kpor have decried the attitude of Shell towards paying compensation to them, claiming that the company is playing politics with their future.

    The Director of Programmes, Centre for Environment and Human Rights, Steven Obodoekwe, who is from Bodo, said litigations would not have arisen if Shell had conformed to the rules that people who suffer from oil pollution, among other hazards, must be paid compensation as early as possible.

    He said the communities resorted to legal action because Shell reneged on its promise to adequately compensate them, noting that Shell’s refusal to pay compensation was part of its agenda to continue to deny the oil communities of their entitlements.

    ‘‘Some of the communities are not aware of the moves to compensate them. The Bodo case is back in a London court because Shell was planning to pay the community a meagre amount of money. Shell is fund of blaming oil spillage among other untoward practices in the region on saboteurs because it wants to evade its responsibility of paying for damages,’’ he said.

    Also, the President, Movement for the Emancipation of Ogoni People (Mosop), Legbosi Pyagbara said the communities and Shell were unable to reach agreement on the issue of compensation.

    Mosop said the communities have asked for a review of the compensation scheme, following the decision of Shell to pay them a meagre amount of money.

    ‘’Shell has accepted liability as regards Bodo community a few years ago. Up till now, the company has not paid the community. Some communities have filed a case against Shell in Netherlands because they are unable to receive compensation. The communities have realised that they cannot achieve anything with the money Shell is planning to pay them.

    ‘’For instance, when a man whose land was destroyed was offered between N100,000 and N200,000, what is he going to do with the money. In real terms, what Shell offered is below the value of the crops that were destroyed by oil,’’ Mosop stated.

  • How GENCOs can improve power, by experts

    How GENCOs can improve power, by experts

    Well-located plants, constructed pipelines, a reasonable price regime, and additional investment in gas sector will help the four power generation companies to improve electricity in the country, experts have said.

    The experts, Supo Shadiya, Philip Ihenacho and Taiwo Afonja, who spoke at a summit with the theme: The Nigerian Gas:The backbone of Nigeria power sector in Lagos, said the Geregu, UghelIi, Shiroro and Kainji power plants would increase electricity megawatts when these above conditions are met.

    Shadiya, a Director at the Nigerian National Petroleum Corporation (NNPC)/Chevron Nigeria Limited Joint Venture, said infrastructure were crucial to the growth of the gas sector, adding that with the right infrastructure in place, it would be easier to produce enough gas for the power generation firms.

    He said investment in gas pipelines, among other critical areas, would help to foster the growth of power sector. He urged the governemnt to construct the East-West and North gas pipelines to enable power generation firms operate well, saying when this happens, firms would be able to access gas irrespective of their locations.

    Shortfall in gas production, he said, would continue, for as long as Nigeria is not ready to synchronise investments in the sector, stressing that stakeholders need to share and combine ideas for growth. He said immense opportunities exist for those that are ready to tap them.

    With Nigeria’s 179 billion gas cubit feet reserves and an estimated 600billion cubit feet projection, investors, he said, had a lot to gain from the sector, arguing that government’s ability to provide an enabling environment would help the International Oil Companies to produce gas for power firms.

    Ihenacho, the Chief Executive Officer, Seven Energy International, called for a paradigm shift in the ways gas plants are cited in the country. He said gas plants should be evenly distributed, as against the situation where they are sparsely sited. He argued that the manner the gas plants are sited will not meet the needs of the power generation companies.

    He said the collocation of gas plants and power generation companies must be given priority, in view of the problems in the power sector. The gas plants and power generation firms, he said, must be sited close to each other to improve electricity supply.

    Minimal distance, he added, should be between the power firms and gas plants if Nigeria wants to generate more electricity megawatts.

    “‘This brings us to the issue of cost involved in processing and transporting gas from one place to another. The farther the distance between a power generation firm and a gas plant, the higher the cost of transporting the product and vice-versa. Besides is the nature of producing gas. The cost of production varies, depending on the source of the product.

    “For instance, gas derived from deep, semi -deep or shallow onshore attracts different prices. Once consumers (individual and corporate) are not ready to bear the cost, it is a problem for the gas company. To process and supply gas it to consumers require huge investment. Investors can only invest in gas production, when the rate of returns is high,’’ he said, adding that the huge cost of producing and transportating gas, discourage people to shy away from the sector.

    He said the unattractive pricing is a disincentive in gas production and distribution, stressing that the issue has affected the operation of power generation firms.

    Ihenacho added: “A gas pricing scheme introduced in 2010 shows that gas should be produced and transported to designated locations at $1.50 mmbtu. This is a term used to describe the unit of gas processed and transported to consumers). At that price, investment in gas value chain is no longer attractive.

    He said collocation of gas plants must be giving priority to foster growth of the firms.

    Iheancho continued: ‘‘The distance between gas and power plants must not be too long. For instance, the distance between the Escravos Gas Project in Bonny, Rivers States, and Omotoso power plant is long, making it difficult for the plant to access enough gas for operation. Proximity between the gas plants and the power plants is one area that must be given priority in the country.’’

    Afonja, a Partner, Energy and Project Finance, Adepetun Caston-Martins Limited, said investment in gas plants was crucial to the growth of power companies.

    He urged investors to provide bankable projects to grow the gas and power sector. She said financial institutions are not ready to support non-bankable projects, adding that the development has culminated in low investment in the sector.

  • OPEC to boost export by 230,000 barrels

    The Organisation of Petroleum Exporting Countries (OPEC) will increase export by 230,000 barrels in the four weeks to October 12.

    OPEC, in its Outlook for last month, attributed the increase in export to the need to maximise output and further prevent shortfall that accompanies maintenance of refineries in the fourth quarter of the year.

    It said crude shipment would rise by one per cent during the period, adding that two of its members Angola and Ecuador were not affected by the development.

    “OPEC will increase crude shipments by one per cent next month as they maximise flows before refineries are shut for maintenance, according to Tanker Tracker Oil Movements. It’s what you’d expect to happen at this time of year as we start to get into refinery maintenance season. Its boring old seasonality and exports are likely to drift downward until the end of October, or start of November.”

    Refiners typically trim imports at the end of the third quarter while performing maintenance as summer demand in the northern hemisphere for gasoline and diesel dwindles, ‘it added.

    According to the report, crude on board tankers will increase 0.7 per cent to 483.79 million barrels on October 12.

  • NUPENG threatens strike over fuel stations’ attendants’pay

    The National Union of Petroleum and Natural Gas Workers(NUPENG) has threatened to go on strike over what it calls the poor remuneration of Petrol Station Workers.

    Petrol station operators, they claim, pay their staff less than the N18,000 approved minimum wage.

    The General Secretary, National Union of Petroleum and Natural Gas Workers (NUPENG), Mr Isaac Aberare, said the attitude of indigenous oil marketers toward petrol attendants was bad.

    The marketers, he said, were exploiting petrol attendants by paying them below the minimum wage okayed by the government.

    He named some of the companies involved as Conoil, Mobil, Forte Oil, and Rainoil.

    He threatened a nationwide strike by the union if urgent steps were not taken to address the problem.

    But the downstream operators, including the Independent Marketers Association of Nigeria (IPMAN) and the Major Oil Marketers Association of Nigeria (MOMAN) have exonerated themselves from blame.

    IPMAN President, Western Zone, Olumide Ogunmade said managers of petrol stations were expected to handle the welfare of their workers and not the body.

    He said it was a non-union issue, which the association cannot act on.

    Ogunmade said: “Low remuneration of petrol station workers is not a union issue. Though IPMAN is the umbrella body of autonomous marketers of petrol and allied products, fighting for petrol station workers is outside its purview. The issue has nothing with our union. If a station manager employs 10 people for instance, he or she decides what to pay the attendants. We have nothing to do with that issue.”

    A Senior official of Conoil Plc, Mr Azeez Abiodun also exonerated his company, saying the firm places priority on the welfare of its staff irrespective of their jobs. He said though it does not employ people that work at its stations, it advises that such staff be well-catered for.

    “For instance, if a company has given out its operations to firms to manage, it has no right to interfere in the ways the firms are paying their workers. The fact that you are working in a Conoil petrol station does not mean you are an employee of Conoil,” he added.

    The Nation learnt that some petrol stations pay their workers between N10, 000 and N12,000 monthly.

     

  • OPEC to cut production by 500,000 barrels

    The Organisation of Petroleum Exporting Countries(OPEC) may cut oil production by half a million barrels a day when its meets in December, the International Energy Agency(EIA) has said.

    The body said if all go accoridng to plans, the reduction in production would be the first in five years since the last time such exercise was carried out was 2008.

    It said: “ The last time OPEC cut its oil output was in late 2008 when it reduced production to 4.2 million barrels a day. During this time, oil demand fell and prices crashed amid the financial crisis.

    Lately, Gulf countries, including Saudi Arabia, have supported keeping the production ceiling at 30 million barrels a day, The organisation could reduce production by half a million barrels a day due to the surge in the North American shale boom,”

    OPEC’s latest report, released last week, projected that demand for its crude will slide 500,000 barrels a day next year to 29.4 million barrels of oilper day (MMbpd), or about 2.6 per cent less than the organisation is currently producing,’

    It added that OPEC is ‘concerned’ about US/Canadian production increases and its implications on the global oil market.

    The International Energy Agency also stated that demand for OPEC oil in 2014 will fail to meet its current production of around 30 million barrels per day, in its released report last week.

    It said OPEC will try to maintain production levels in order keep prices from falling below $100 a barrel.

    According to the body, the development coincides with a surge in oil supply from countries outside the OPEC group.

  • Firm to deepen gas utilisation

    Green Gas Limited has introduced a device through which people can buy Compressed Natural Gas (CNG) for their vehicles. Known as Smartcard, the device allows people to make payments by instalments for kits among other ancillary components needed to use in gas -powered vehicles.

    The firm, a subsidiary of the Nigerian National Petroleum Corporation (NNPC) and NIPCO Plc, said the card is contactless, has a chip to ensure stress-free, faster and more convenient method of effecting CNG accessories. It said the idea would help in increasing the number of users of gas over other sources of energy.

    It said the card, known as, ‘Go Green,’ is part of the measures to deepen the use of compressed natural gas by reducing financial stress on customers wishing to benefit from the growing benefits of switching to gas as auto fuel, adding that the card enables motorists to validate the CNG components in their vehicle for periodic inspection, routine safety check and guard against counterfeiting of any sort.

    The firm explained that the technology was developed in Nigeria by Universal Embedded Technologies Limited.

  • ‘How to improve power generation’

    Nigeria requires a multi-sectoral approach to electricity generation for growth, the General Manager, Sh’oreline Group, an energy service provider, Mr Gabriel Okoebor has said.

    Speaking with reporters on the need to improve electricity generation and distribution, using energy service providers, among others, Okoebor said the efforts of the 13 power generation and distribution firms can only be complemented when there is a multi-sectoral approach to power improvement in Nigeria.

    He said the suggestion by the Central Bank of Nigeria’s (CBN) Governor, Sanusi Lamido Sanusi, that banks located in a specific area should pull their resources together and use one power plant instead of big generators, is good, urging that other sectors should take a cue from act accordingly.

    He said the success of the power reforms would result in the upgrade of electricity generation and distribution to global standards. He said thousands of electricity megawatts are required to meet the growing need of the populace.

    He said thousands of megawatts of electricity are required in the country and that it could take eight years to get these, adding that focus should be placed on industries too.