The Nation Newspaper

Category: Energy

  • Aba Geometrics Power begins distribution July

    The $460 million indigenous private power generation company, Geometrics Power Limited, is to start generation and distribution of power next month.

    Speaking with reporters at the plant’s premises at Osisioma near Aba after hosting the leaders and members of National Union of Electricity Employees (NUEE), and inauguration of a chapter of the union at the plant, the Chairman of Geometrics, Prof Barth Nnaji, said all is set for the take off of the power plant.

    Nnaji, a former minister power, said the inauguration will be performed by President Goodluck Jonathan in August.

    He said there are three firms under Geometrics, which include power generation, distribution and marketing, adding that after generating power, distribution will be done by Aba Power Limited.

    He also explained that the power plant will generate 141 megawatts (MW) of electricity daily, adding that Aba, which is the main target, will get substantial quantity that would meet the power needs of its residents, while the excess will be supplied to Nnewi in Anambra State.

    Nnaji said the major aim of his company, which was started in 2004, is to upgrade the economic potentials of Aba in particular and the Southeast in general. He said Aba has the opportunity of becoming the industrial capital of Nigeria.

    He noted that one of the problems facing small, medium and large scale industries in the area is the issue of power.

    “Once this power plant comes on stream, the issue of power failure and wastage of man hour by the workers will be a thing of the past as the problem will be eliminated,” he added.

    The Geometric boss described the project as a huge statement for Nigerian investors, stressing that the company is a private sector company with local content and committed to bring revolution in the power sector in the country.

    On the number of employees the plant will engage, Nnaji said only 400 people will be employed “but when companies get connected to the plant, they will create thousands of jobs, which will have a multiplier effect in the labour market.”

    He commended the Abia State Government for its continued supports particularly for constructing an access road to the plant and for granting the company waivers, saying that Governor Theodore Orji has remained a great source of encouragement to the power plant.

    Earlier, Joe Ajaero, the National Secretary of NUEE, applauded the courage of Nnaji in venturing into the sector, which he described as highly capital intensive and with many hurdles. He called on other indigenous entrepreneurs to emulate him.

    Ajero expressed satisfaction with the massive work and quality of facilities at the power plant, and appealed to government not to completely withdraw from the power sector, arguing that the government has the cardinal responsibility in the some sectors of the economy.

    The new NUEE executives are Comrade Ubaka Edeh, chairman; Oluchukwu Chiegbu, secretary; Christopher Nwaobasi, treasurer, and Nonye Aniji, Woman leader.

  • NIMASA,NLNG unending levy quarrel

    NIMASA,NLNG unending levy quarrel

    Since last month, the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigeria Liquefied Natural Gas Limited (NLNG) have been quarrelling over levy. NIMASA is insisting that it has right to collect levy from NLNG, which claims it enjoys a levy holiday. How can this issue be resolved? EMEKA UGWUANYI Assistant Editor (Energy) writes.

    They are government children with a difference. While the Nigerian Maritime Administration and Safety Agency (NIMASA) is fully owned by government, the Nigerian Liquefied Natural Gas (NLNG) is a public-private initiative, with government owning 49 per cent of its equity.

    They next highest shareholder has 25.6 per cent interest.

    The duo early last month reopened an old conflict, on payment of levies by the NLNG. However, the Federal Government through the relevant agencies intervened appropriately and arrived at a resolution that NLNG should pay its levies, including the arrears from 2009. The two organisations, it was learnt, were asked to discuss on modality of payment. The stakeholders in the petroleum and maritime industries hailed the resolution as a welcome development considering the roles and importance of the two firms to the economy.

    But barely a month into the settlement, a fresh conflict has begun to brew between the two institutions resulting in court action and disruption of operation. The disagreement may have arisen as a result of non-compliance with the resolution by the government and taking of NIMASA to court last week by NLNG, which sought injunction to prevent NIMASA from imposing any charges or taking any steps to block, detain or prevent access by NLNG’s owned or chartered vessels, whether inbound or outbound from Bonny channel or elsewhere in Nigeria.

     

    NLNG’s position

     

    NIMASA had at the weekend prevented some NLNG’s vessels from operating, which the NLNG saw as violation of court order. NLNG’s General Manager, External Relations, Kudo Eresia-Eke, in a statement said on Friday June 21, two NIMASA boats with 15 naval officers on board, ordered that one NLNG vessel (LNG Imo) and one chartered vessel (Torm Thames), remain at NLNG’s loading bay, while another NLNG Vessel (LNG Oyo), remains outside the Bonny Channel until further notice.

    NIMASA, she said, subsequently issued Ship Detention Orders on June 22, specifically detaining three NLNG ships (LNG Enugu, LNG Oyo, LNG Imo) and barring them from accessing or leaving the Company’s loading bay.

    She said: “These developments are in flagrant disregard of the court injunction issued by the Federal High Court in Lagos in Suit No FHC/L/CS/847/2013 by Hon. Justice M.B. Idris, presiding, on Tuesday, June 18, 2013, against the Attorney-General of the Federation, Global West and any other parties including Nigerian Maritime and Safety Agency (NIMASA) from imposing any charges or taking any steps to block, detain or prevent access by the company’s owned or chartered vessels, whether inbound or outbound from Bonny channel or elsewhere in Nigeria.

    “It will be recalled that on May 3, 2013, NIMASA blocked the Bonny Channel preventing entry and exit of NLNG vessels. This led to a series of meetings at the instance of the Federal Government, which eventually ordered that the company should pay NIMASA its purported levies.

    “In deference to the Government, NLNG made a payment, under protest, in the sum of US$20 million (approximately N3.2 billion) into NIMASA’s designated account and subsequently approached the court to seek proper judicial clarity and a lasting resolution to the conflict between the NLNG Act and NIMASA Act.

    “The potential implications of this current action by NIMASA on NLNG operations are enormous and would impact negatively on its international LNG buyers, the international financial market, Nigeria to which NLNG contributes four per cent of the country’s GDP, its shareholders and the investment climate in Nigeria, let alone the reputational impact this may have on Nigeria’s image within the international investment community.”

    On the reason NLNG went to court, Eresia-Eke said it was instructive to note that Nigeria LNG Limited and its shareholders still firmly believe in the rectitude of their earlier position that NLNG is duly protected by the provisions of the NLNG Act against the payment to NIMASA of the Sea Protection Levy, the three per cent freight levies on cargo exports shipped by NLNG, and that the two per cent Cabotage Levy on LNG carriers is inapplicable because NLNG’s LNG vessels are not involved in coastal trade or cabotage.

    She said “NLNG is a Nigerian company involved in, almost exclusively, international export business and is thus subject to all relevant national and international laws, standards and ethos with which it must comply. This, amongst others, requires that all its dealings are governed and premised on the universal principles of the rule of law to which the Nigeria Government also affirms its commitment.

    “The company has often clarified that the issues it has with payment of any levy, charge or impost has little to do with the amounts involved, but more with the principle of the rule of law, so that it can safeguard its international business, which rests squarely on its reputation as a law abiding company, as well as Nigeria’s reputation in the global community.”

     

    NIMASA’s stance

     

    NIMASA’s Deputy Director/Head, Public Relations, Isichei Osamgbi, said payments of the levies demanded of NLNG have been long overdue. He said the Act that established NLNG exempted it from paying levies as incentive to enable the shareholders recoup their investment. However, it stated clearly that the incentive was not meant to last forever. He noted that Section 2 of the NLNG Act also limits the tax holiday of the company to 10 years “or when the cumulative average sales price of LNG reaches US$3 in million metric British Thermal Units (MMBTU) as calculated in the First Schedule to the Act, whichever is earlier.”

    But as of January 2004, the New York Mercantile Exchange (NYMEX) indicated that the price of gas stood at US$9 per million metric British Thermal Units, indicating that the milestone for the expiration of the exemption granted to NLNG had been surpassed by 200 per cent in the cumulative average sales price.

    Besides, he noted that NIMASA is funded by money accruing to it through the three per cent of gross freight from all international inbound and outbound cargo from ships or shipping companies operating in Nigeria as stipulated in NIMASA Act of 2007. Also refusal to pay NIMASA levies by one company may induce others to follow suit, he explained.

    On the blockade and alleged of violation of court order, Osamgbi said: “The Nigerian Maritime Administration and Safety Agency (NIMASA), in its enforcement of Nigerian laws, served detention notices/orders on vessels belonging to/chartered by the Nigerian Liquefied Natural Gas Company Limited (NLNG).

    “This course of action was forced on NIMASA by the NLNG’s subsequent refusal or/and failure to abide by the outcome of the negotiated settlement arrived at through the mediation process it willingly instigated and subscribed to, after reaching agreement with NIMASA on its outstanding debt and paying US$20million out of it and its continued flagrant disregard for Nigerian laws.

    “Contrary to NLNG’s position, NIMASA is not aware of any court order against it or any suit brought by NLNG against NIMASA.

    “By its action, the NLNG has trivialised the mediation process and the position of the Federal Government of Nigeria whose Nigerian National Petroleum Corporation owns and holds 49 per cent of the shares in NLNG and which endorsed the agreement reached that NLNG should pay its taxes/levies and observe all its obligations under the laws of Nigeria in which it is operating.”

    Osamgbi also explained that besides being a regulator and ensuring safety of the Nigerian waters, NIMASA has other responsibilities. For instance, he noted that about $6 billion is raked in as tax by Filipinos that operate vessels in Nigeria. Also Nigerians, he said, don’t own vessels, adding NIMASA is trying to develop capacity and competence in these areas.

    He said: “Iin these areas, NIMASA plans to give up to 50 per cent support, while banks can give up to 35 per cent and the person or firm will provide 15 per cent but the banks have to guarantee our support and that of the firm or person by conducting or carrying out due diligence on the person or firm to confirm if such beneficiary is qualified.”

    On training aimed at human capacity development, he said NIMASA has three programmes. The agency, he explained, sponsors one of the programmes wholly while the second programme is sponsored jointly by agency and the state government of the beneficiary on the ratio of 60:40 per cent and the cost of the third programme is wholly borne by the beneficiary while NIMASA gives the necessary guides.

    He said it is only the Oron Academy that develops human capacity for the maritime industry and it doesn’t award degrees. Consequently, he said the agency wants to enter into partnership with some institutions including the University of Nigeria, Nsukka, University of Lagos, and Niger Delta University, among others to produce the right personnel for the industry.

    NIMASA, he noted, needs funds to meet its obligations of developing the right skills among Nigerians, create employment and most of all, ensure Nigeria waters is safe and operations carried out with best global practices and in conformity with laws.

    NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation (NNPC) 49 per cent; Shell Gas BV, SGBV, (25.6 per cent); Total LNG Nigeria Limited (15 per cent); and Eni International (N.A,) N. V. S. a. r. l (10.4 per cent).

  • ‘Why there is power failure in Ibadan’

    The Power Holding Company of Nigeria (PHCN) in Ibadan has explained the reasons for the poor power supply in the state capital and its environs in the past few days.

    The Principal Manager, Public Affairs, Ibadan Electricity Distribution Company, Tokunbo Peters, said the poor power supply was as a result of a sharp drop in supply to Ibadan.

    He said in most cases, a Business Unit, which requires 45 megawatts (MW) for its customers is restricted to just 10MW, while in some cases the six Business Units were placed on zero allocation.

    The management of the company, he said, appeals to the company’s customers in Ibadan and the surrounding towns to bear with it during this critical period as it is not unmindful of the discomfort and inconvenience, which the load-shedding may have caused them.

    It implored members of the public to refrain from invading PHCN offices or molesting its employees on account of the load-shedding since the company does not generate electricity, but only distributes whatever megawatts it receives from the source.

    The management said: “Mass protest and invasion of PHCN offices would not translate to improved power supply. Customers should be mindful of the fact that PHCN employees live amongst them and they also endure whatever hardship or discomfort that is created by the poor power supply situation.

    “Concerted efforts are being made to improve power supply to customers at Felele, Challenge, Odo-Ona area of Ibadan and environs as PHCN has constructed another 33kv Feeder from Ayede 132/33kv Transmission substation to the interchange 33/11kv Injection substation. As soon as the new 33kv Feeder is commissioned, there will be much improvement in power supply to customers in Felele, Odo-Ona, Idi-Ayanre, Elewura, Orita-Challenge and environs.”

  • SPE to hold conference July 30

    THE Society of Petroleum Engineers (SPE) Nigeria Council will hold its yearly International Conference and Exhibition (NAICE) between July 30 and August 1, in Lagos.

    It has theme: To grow Africa’s oil and gas production: Required policy, funding, technology, techniques and capabilities.

    The Chairman of its Nigeria Council of the association, Mr Osayande Igiehon, told reporters in Lagos that the council will introduce two novel programmes – a workshop, which will focus on marginal field development best practices, and women development network.

    He explained that the organisation is concerned with the increasing crude oil theft, depleting reserves and dwindling revenues from crude oil sales and would extensively brainstorm on these issues with a view to proffering solution.

    He explained that the theme was chosen because it was observed that crude oil reserves in the region has continued to decline.

    The conference, he noted, aims to provide a platform to help governments, industry and academia position for the aspired production growth, which will be crucial to achieving needed economic growth in Africa and meeting the world’s growing energy needs.

    He said: “As exploration of crude oil never ceases, there is need for further discoveries of more reserves to replenish those already extracted from oil wells. So, the challenge of inventing new technologies to aid new crude oil discoveries and to reduce cost of operation would be discussed in order to find lasting remedy to it.

    He said the marginal field best practices workshop will feature seasoned experts who will proffer valuable ideas on how to improve the success rates and increase the contribution from marginal fields to meet the overall production growth aspirations, he added.

    Expected at the three-day event are Governor of Lagos State, Minister of Petroleum Resources and the SPE International President who will be special guests.

    During the conference, short courses will be offered on reservoir modelling, communication skills, petroleum geomechanics & wellbore Stability, Strategic Leadership and Monte Carlo Simulation Approach and well and reservoir management.

  • Execute LNG projects quickly, says expert

    Senior Business Strategy and Performance Analyst, Nigeria Liquefied and Natural Gas (NLNG), Ezekiel Adesina, has stressed the need to expedite action on the implementation of the impending Liquefied Natural Gas (LNG) projects in the country.

    Also included are the NLNG Train 7, Brass LNG, and Ok LNG, for long term export contract and other economic benefits, he said.

    Adesina, who spoke in Lagos, said the consequences of alternative gas such as shale gas, coal-bed methane (CBM), tight gas and gas hydrate, could be reduced if urgent measures are put in place in the sector.

    Such measures,he explained, include change of business strategy for export and local market, diversification of business group for domestic use of natural gas, the independent power projects (IPPs) and the petrochemical plant. He added that non-gas investors should not be allowed to participate in gas exploration.

    He stressed the need to exploit full gas value chain, upstream, midstream and downstream of the gas sector as well as gas fiscal incentives. These he said would promote new investments in the sector.

    Adesina said with 187 trillion standard cubic feet (Tscf) of proven gas reserves in the country and potential of 600 Tcf in probable reserves, there is need to fast-track the implementation of the Gas Master Plan to overcome some of the bottlenecks in the sector.

    He said the AGFA fiscal regime favours existing upstream investors. He added which according to him, acts as a barrier to non-oil investors and new entrants into the gas sector that there is need to create a separate fiscal regime for gas to make possible a level playing field for all investors in the sector.

    Adesina said the gas value should be unbundled to allow various players within the value chain to participate and increase its growth.

    He said Nigeria can only survive the current change in the global energy if the country will quickly respond to change in the oil and gas sector.

    He said: “There is need for us as a nation to have a sense of urgency in actualising numerous plans and projects in the gas sector before the economic benefits of our gas natural resources are lost. The need for change cannot be ignored if Nigeria gas agenda of making Nigeria a gas hub destination in Africa is to be realised.”

    He said there is need to take a critical look on the global gas environment and the Nigeria gas market in view of the current unconventional gas revolution across the globe, adding that the unconventional gas will continue to challenge the current gas business model.

    He said the economic viability of unconventional gas could be realised with technological advancement and pursuit of efficiency to reduce costs, financial risks and wellhead prices in production.

    Shale gas started with Mitchell Energy in 1990s. It pioneered the application of two oilfield techniques, hydraulic fracturing and horizontal drilling, to release natural gas trapped in hardy shale-rock formations. Economies of scale and improvements in techniques have halved the production costs of shale gas, making it cheaper even more than some conventional sources.

  • Firm okays flared gas to power technology

    Clarke Energy is employing containerised gas engines for the production of power using flared gas.

    The technology, if effectively put into use, is capable of converting gas being wasted through flaring, to generate power for local areas and reduce emissions into the atmosphere.

    The company said it would convert waste product into energy, adding that this can be deployed in sites and passed to power stations.

    Speaking with The Nation in Lagos, the Group Marketing Manager, Alexander Marshall, said the technology would impact on the industry by reducing gas flaring in the Niger Delta region thereby enhancing the quality of life of the people of the area. He said it would also enhance the economy of the country.

    He said: “Because you flared this gas before, and now you can covert it into money, it becomes a resource for the country. A lot of industries can spring up in the communities that didn’t have power but have gas that was flared because such flared gas can be converted into power, and the people’s lives would be enhanced because small businesses that rely on power can now be established. Besides, the power supply will be continuous. It is not something that would be unpredictable as far as the gas is there. This would impact positively on the economic life of communities,” he said.

    He said the company provides solutions for the delivery and maintenance of gas engine power plants, including the supply of turnkey installation of a gas-fuelled and heat power plant.

    Marshall said the company has experience in a wide range of renewable and high-efficiency gas applications including natural gas, biogas, landfill gas and coal gases.

    He said the engine capacity ranges from 330kw to 9.5mw as a single unit and that the company could do projects from one mw to 50mw.

  • Shell lists benefits of summit

    Shell lists benefits of summit

    AN investment summit hosted by Shell and the United Kingdom Trade and Investment (UKTI) has created opportunity for more partnerships between Nigerian and United Kingdom investors.

    According to a statement by Shell, the event attracted about 100 Nigerian and British firms that shared their offerings and capabilities to explore areas of partnerships. The summit was held as part of efforts to forge partnerships among businesses in both two countries.

    Some 45 British companies met with their Nigerian counterparts to discuss potential areas of collaboration in engineering, procurement, installation, commissioning (EPIC) contracts, manufacturing, fabrication and general oil and gas services.

    It is expected that the partnerships resulting from the summit will help grow the capacity of Nigerian companies in provision of goods and services in the oil and gas industry, Shell said.

    Welcoming participants to the summit, the Managing Director Shell Nigeria Exploration and Production Company (SNEPCo), Chike Onyejekwe, said Shell is committed to further developing local content in Nigeria. “Last year, Shell companies in Nigeria awarded contracts worth $2.4 billion to Nigerian companies, one billion dollar more than the amount in 2011. Local content is good for Nigeria and for the business and we’re determined to raise the game,” he added.

    In a keynote address, the Executive Secretary of the Nigeria Content Development and Monitoring Board, Ernest Nwapa, commended Shell for the “sustained interest in the Nigeria/UKTI investment forum.

    He said: “Since the first summit, we’ve seen a significant number of companies participating at the event and we hope they will focus on areas that will improve their capability. It is good to see that other international oil companies (IOCs) are beginning to follow Shell’s example by organising similar engagements.”

  • Can power plants generate 5153MW?

    Can power plants generate 5153MW?

    The 10 power plants, built under the National Integrated Power Project (NIPP) and supervised by the Niger Delta Power Holding Company (NDPHC) on behalf of the three tiers of government, are expected to generate 5153megawatts(MW) and be fully privatised by mid next year.But can the company generate 5153MW when it is eventually handed over to investors? Assistant Editor (Energy) EMEKA UGWUANYI asks

     

    The planned privatisation of the 10 power generation plants built under the National Integrated Power Project (NIPP) has begun, with the kick off of the road-shows in Lagos road-shows, which also will be held in the United States, the United Kingdom and some Asian countries, are platforms employed by the Niger Delta Power Holding Company (NDPHC) to meet with prospective investors that have capacity to buy the assets.

    The NIPP programme was conceived in 2004 as a fast-track initiative to add significant new generation capacity to Nigeria’s electricity supply system. Besides construction of 10 power plants, the project factored in construction of complementary electricity transmission and distribution infrastructure, as well as the infrastructure required to deliver the natural gas needed at the power plants.

    The NIPP projects are funded from the excess crude account, with the Federal Government contributing 47 per cent of the funds, while the 36 state governments contribute 35 per cent and the 774 local governments 18 per cent. Currently, an approximated S$8.4 billion has been committed to the project, the Managing Director of NDPHC, James Olotu said.

    The NIPP plants were designed to deliver combined installed capacity of 5,453 megawatts (MW). Eight of the 10 power plants are designed as Open Cycle Gas Turbine (OCGT) power plants and the other two as Combined Cycle Gas Turbine (CCGT) power plants. The CCGT power plants, can generate power through gas and steam turbines but because of timeline for handover of the assets to new investors proposed for mid next year, the completion of the steam turbines might not be realistic.

    For instance, the Alaoji power plant was designed as a CCGT project with a plant capacity of 1,131.4 MW. However, it is expected that, by the handover date for this plant, only one of the steam turbines would have been installed. Therefore, the plant will be available for commercial operation as an 831.3 MW plant. As result of some of these hitches, the NDPHC is projecting a combined generation of 5153.1MW as against 5,453MW by the time the assets will be handed over to the new investors.

    Besides the anticipated inability to construct the steam turbines in the combined cycle plants within the stipulated period, there are other concerns including the provision of pipeline to supply gas to the assets. Currently, the NIPP plants supply below 2,000MW, indicating that over 3153MW will be realised from the project in the next one year.

    At several meetings, Olotu has lamented the dearth of gas supply to completed turbines in some of the NIPP assets. Also,there are still some of the power plants that have several outstanding turbines to build. Although the timelines look good, to achieve them seem pretty difficult.

     

    Initial output

    According to the NDPHC chief, Olotu, the Alaoji Generation Company Nigeria Limited located in Abia State, which is the biggest of the power plants will be generating 831.3MW at the time of handover, while the Benin Generation Company Limited in Ihovbor, Edo State, will have 507MW output. The Egbema Generation Company Limited, Imo State, Gbarain Generation Company Limited, Bayelsa State, Calabar Generation Company Limited, Cross River and Geregu Generation Company Limited in Kogi State will have generation capacities of 380.7MW, 253.8MW, 634.5MW and 506.1MW.

    Ogorode Generation Company Limited in Sapale, Delta State will be generating 507.6MW, while Olorunsogo Generation Company Limited in Ogun State will have 754MW output. Omoku Generation Company Limited in Rivers State will be generating 264.7MW with Omotosho Generation Company Limited in Ondo State supplying 512.8MW.

    According to Olotu, seven of the eight OCGT power plants could be upgraded to CCGT configuration, adding that five of the power plants are either fully or partially operating today.

    He noted that four gas turbines of Alaoji Genco will be commissioned by December 2013 while one of the two steam turbines of the plant will be commissioned in May 2014. Other plants that some of their turbines will be commissioned in 2014 include Calabar Generation Company Limited.

    Olotu noted that NDPHC has made some substantial investments in transmission and distribution. He said 2,370MVA of 330kV and 132kV transformer capacities already in service in the national grid, while 519km of transmission lines have been strung out of 2,903km with 346.7km of transmission lines already in service or energised awaiting full utilisation.

    In distribution, 72 injection substations have been commissioned, with 3,517 completely self- protected 25kVA and 50kVA customer transformers installed and 650MVA out of 3,750MVA of 33/11kV Injection substation already in service or awaiting full utilisation.

    He said that 80 per cent of the outstanding shares of the plants will be sold following a competitive bidding process. Each generation company will benefit from a contract structure covering the sale of electricity, the supply and transportation of natural gas, and access to the electricity transmission network, he added.

    Meanwhile, the timelines of the privatisation indicate that submission of expression of interest is July 19, short-listing of bidders August 8, availability of request for proposals August 16, while opening of data rooms is on August 16. The bidders conference in Abuja is billed for September 18-19 while deadline for submission of proposals holds November 8.

  • Lagos LPG to get supply from NLNG, NIPCO

    The Lagos State liquefied petroleum gas (LPG) known as ‘Eko Gas’, which is being run in partnership with private sector operators, will get supply from the Nigeria Liquefied Natural Gas Limited (NLNG), it was learnt.

    This is to guard against supply of substandard LPG also called cooking gas, to consumers.

    Chairman, LPG group of Lagos Chamber of Commerce and Industry (LCCI), a partner in the project, Omo’ ba Bambo Ademiluyi, said all safety measures had been taken into consideration. He spoke against the backdrop of the alleged substandard LPG in circulation and explained that the partnership was aware of supply of high propane content LPG, which is dangerous considering the obsolete and substandard gas cylinders in the system.

    He explained that even though the LPG (cooking gas) with high propane content is mostly distributed in the North because it is supplied from Niger Republic, the safety measures factored into the Eko Gas project is tight.

    He said all the LPG that would be supplied to Eko Gas would come from NIPCO and Nafgas facilities. The two firms get their supply only from the NLNG. “Therefore, the issue of supply of product with high propane content will not arise,” he added.

    He noted that the companies that would supply the cylinders will be member-firms of the chamber to ensure that the integrity of the cylinders is guaranteed.

    Ademiluyi said: “We are mindful of the LPG in circulation, and the utensils that are being used to take LPG from the filling plants to the homes. We are aware and also Standard Organisation of Nigeria (SON) and the Department of Petroleum Resources (DPR). We are all aware that a lot of these cylinders are very old and a lot of the new ones are substandard. However, for this scheme, the people that will be supplying all the cylinders, utensils, and skid plants, among others, are members of LCCI, their companies will not cut corners. They are all registered with the DPR, they have certification for their imports and we don’t expect anything untoward.

    “As regards high propane content LPG, it is predominantly circulated in the north, because it comes from Niger Republic. The two plants where we will be taking LPG from for this key project are NIPCO and Nafgas. Those two facilities don’t take LPG from anywhere except NLNG. Therefore, the integrity of this scheme is tight. One of the key things taken into consideration is safety because a single explosion of cylinder can bring the scheme down.

    “We have also designed an elaborate awareness creation programme for the scheme to educate people on the need to convert to use of LPG.”

    Lagos State Commissioner for Energy and Mineral Resources Taofeeq Tijani, said Eko Gas project, which was rolled out last week is approved by the Executive Council (Exco).

    He said: “The chief executive of the state is backing the initiative because the product is efficient, safe, support the environment and will be a benefit to the people.

    “The Ministry of Energy and Mineral Resources has got approval from the governor and executive council of Lagos State to adopt LPG as the fuel of choice for Lagosians. Having got the approval, we have worked with all stakeholders particularly the LPG Group of LCCI, those involved in LPG cylinders and products marketing. We have worked out the formula on how we will inform Lagosians on how we will distribute affordable cylinders and all the places the products can be obtained.

    “LPG skid tanks will be built in strategic locations for easy access of the product by consumers. The product will be launched in Surulere today. It is an opportunity for Lagosians to convert from use of kerosene, charcoal, and firewood to a cheaper, safer, cleaner and more reliable fuel.

    “Why we embarked on the initiative is because LPG is used worldwide as fuel and Nigeria produces the product in large quantities and most of our refineries have LPG as a by-product. International oil companies particularly NLNG and ExxonMobil, among others produce it. NLNG dedicated 150,000 metric tonnes to be used in Nigeria but as I speak, Nigeria is the largest supplier and lowest consumer of the product in Africa. The 150,000MT is still available and Nigerians are yet to consume up to that volume.

    “Therefore, part of this initiative is to work with all stakeholders to fully utilise consumption of this volume and more. We are also looking at companies that have built storage tanks in Lagos, NIPCO 4,000MT, Nafgas 8,000MT, Pipeline and Products Marketing Company (PPMC), a subsidiary of Nigerian National Petroleum Corporation (NNPC) 4000MT. These storage facilities will help us move the products from where it is produced to demand centres in Nigeria.”

  • Our production rights intact, says NPDC

    The strategic alliance agreement with Atlantic Energy Drilling Concepts did not include transfer of the production rights of Nigerian Petroleum Development Company’s (NPDC), The Nation has learnt.

    This is contrary to the petition by a group called Restoration Niger Delta.

    A reliable source in NPDC, which is the exploration and production arm of the Nigerian National Petroleum Corporation (NNPC), told The Nation that the pact between the two parties was neither divestment of asset nor transfer of operatorship but simply an alternative funding arrangement in order to meet the NPDC’s cash call obligations in the Oil Mining Leases (OMLs) 26, 30, 34 and 42 in question.

    The Restoration Niger Delta in a petition alleged an untoward transfer of 60 per cent of the 55 per cent equity holding in the form of production rights of NPDC in OMLs 26, 30, 34 and 42 to Atlantic Energy Drilling Concepts.

    Dismissing the petition, the NPDC source said: “There is no place in the petition where the particulars of NPDC ‘s equity interest in the OMLs were shown to have been transferred whether in part or wholly to Atlantic Energy Drilling Concept Limited in defiance of the intendment of the Procurement Act.”