The Nation Newspaper

Category: Energy

  • Local content: PTI boss lauds NLNG

    THE Acting Principal/Chief Executive Officer, Petroleum Training Institute, Mrs N. C. Dennar, has praised the management of NLNG for supporting the institute to achieve its objectives.

    She spoke at a workshop for training managers of oil and gas and allied companies and PTI in Port Harcourt.

    She said: “I must add that effective and fit for purpose training is a critical part of this process. There must be a clear understanding of the unequivocal role that the training function is called upon to play in shaping the future outlook of the industry. This is the reason the training managers’workshop is critical to us, to provide a forum to brainstorm on the needs and aspirations of the industry in line with modern technological trends.”

    In a lecture entitled: ‘’Building internal capacity for future sustainability – the NLNG experience”’, a Human Resources Manager with LNLG, Dr Yahaya Lawal, stressed the importance of capacity to the sustenance of businesses. He listed the various the different methods, processes and models by LNLG in building its capacity.

    In a communique, the participants urged PTI, among others, ‘’to initiate strategic partnership with professional bodies, such as SPE, NAPE and the Federal Ministry of labour to obtain international certification for its industry-related courses and that the state-of-the-art equipment installed under the PTDF upgrade project to provide a crucial basis for acquiring self-accreditation.”

  • Schneider Electric promotes access to energy

    Schneider Electric, global specialist in energy management, has donated a 300KVA distribution transformer to the Institute for Industrial Technology (IIT) in Lagos.

    Schneider Electric made the donation to the institute under its corporate social responsibility initiative.

    Prior to this donation, the institute and its environs were not connected to the national grid, thereby resulting in arbitrarily high costs of running the institute on generators.

    In 2008, Schneider Electric embarked on an access to energy programme, which included the provision of sustainable renewable energy solutions to people at the base of the pyramid and strong investments in electrical technical training.

    Speaking at the inauguration event, Country President, Mr Marcel Hochet, said: “We are not only here to do business but to also contribute to the development of the people and society. We are, especially, concerned about technical education and are committed to increasingthe levels that exist today in the country. Standard technical training isessential to real economic development and we will continue to invest intraining and maintain our partnership with IIT.”IIT, is a world class, non-profit, single sex, technical – vocational school, known for its high technical and moral standards.

    “IIT offerstop-quality hands-on practical skills training to Nigerian youths andadults mainly from the lower income stratum of society. The extremely highquality training received has enabled its students become easilyemployable and to advance rapidly in their careers. This empowers studentsto improve their family income, hence their socio-economic conditions. Programmes include courses in electromechanics, mechatronics, modular programmes (welding, electrical installation, bricklaying, refrigerationand air conditioning, pipework, tilling) and pneumatics & valves. In his appreciation speech also at the event, current

    Director of IIT, Mr Olumide Akinjo, said the gesture by Schneider Electric could not have come at a better time, when the school was in dire need of a regular source ofelectricity supply. He added that the provision of grid electricity hasgreatly reduced the cost of running the school.

    He thanked the managementof Schneider Electric for its support in educational and training materials over the last four years and expressed the institute’s interestto continue and grow the partnership between the two.

  • ‘Oando’s LPG programme can save Nigeria N5b yearly’

    ‘Oando’s LPG programme can save Nigeria N5b yearly’

    Oando Marketing PLC’s Liquefied Petroleum Gas (LPG) programme, under which the company introduced OGAS 3-kilogramme cooking stove for low income households, is capable of solving the perennial problem of deforestation in Nigeria.

    This was one of the high points of the presentation and discussion during an Oando/ACCESS AFRICA – Agriculture, Climate Change and Entrepreneurship Support Services summit in Abuja, which has as theme, ‘LPG as a climate control tool in Africa: The Sustainability Agenda.’

    According to the discussants, the clamour for the use of LPG for cooking was premised on the fact that it would check uncontrolled felling of trees for firewood, with its attendant deforestation and indoor air pollution consequences.

    This year’s summit, the first edition, which was chaired by a former First Lady and Founder, Women’s Right Advancement and Protection Alternative, (WRAPA), Justice Fati Abubakar, noted that over 90 per cent of households in Nigeria use firewood or Kerosene despite harmful effects.

    The summit acknowledged that though deforestation was a global challenge, it noted that a situation where three million cubic feet of wood was cut annually for firewood in a country, which ranked as sixth largest producer of natural gas in the world was unacceptable.

    Chief Executive Officer, Oando Marketing PLC, MrYomi Awobokun, in a lead presentation, remarked that “annually, the country spends about N5billion to tackle desertification through the national afforestation programme. This cost is avoidable.

    “If the government at all levels adopt the use of LPG as the preferred cooking fuel, and avail the people, especially those in rural Nigeria, an affordable cooking stove like the OGAS 3-kg stove, we will be making tremendous saving that can be committed to other important areas of our national life”.

    Citing statistics from relevant national and global bodies, the Operations Director of Access Africa, Mr. Jerome Okolo in his presentation, said Nigeria lost 55.7per cent of its primary forests between 2000 – 2005.

    With the country also losing 351,000 hectares of landmass to desert encroachment, according to statistics, Okolo said the rationale behind the proposal for a switch from firewood to LPG was also to save the country from drought.

    He stated that the N760billion spent annually on kerosene by the Federal Government , is equivalent to 16 per cent of the country’s annual capital budget, adding that Nigeria requires only an estimated 20million cylinders to switch from Kerosene to LPG, thereby saving the government over N760 billion annually.

    The Oando’s initiative, which brought together many national and international stakeholders, including the British Department for International Development (DFID) to mobilise commitment towards the adoption of LPG as the preferred cooking fuel, was a boost to the United Nations collaborative programme on Reducing Emissions from Deforestation and forest Degradation (UN-REDD) in developing countries.

    Oando plans to switch 5million homes from the use of dirty cooking fuels to LPG, a clean, safe, convenient, environmentally healthy, and affordable cooking fuel option through its OGAS 3kg initiative to address the menace of deforestation and other problems associated with the use of dirty fuels.

    UN-REDD programme is a global effort anchored by the United Nations to reduce emissions from deforestation and forest degradation. Nigeria is one of the 46 partner countries of the UN-REDD programme across Africa, Asia-Pacific and Latin America and the Caribbean.

    The programme was launched in 2008 and builds on the convening role and technical expertise of the Food and Agriculture Organisation (FAO) of the United Nations, the United Nations Development Programme (UNDP) and the United Nations Environment Programme (UNEP).

    The programme supports nationally-led REDD+ processes and promotes the informed and meaningful involvement of all stakeholders, including indigenous peoples and other forest-dependent communities, in national and international REDD+ implementation.

    Nigeria’s Minister of Environment, Hadiza Ibrahim Mailafia, said the UN-REDD Programme’s invaluable support has enabled the country “to leap-frog from observer to full REDD+ participating country”.

  • Local Content Act: How far can it go?

    Local Content Act: How far can it go?

    The Local Content Act designed to cede 70% of oil contract jobs to Nigerian firms, is seen as one strategy to push sustainable growth, create employment, value-addition and technology transfer. The initiative, when fully implemented, is expected to drive the economy, Daniel Essiet reports.

     

    To ensure oil and gas resources generate large, long-term economic benefits for the nation, including, skilled employment for Nigerians, the government promulgated the Local Content Act.

    As a result, the industry’s activities are coming under increased scrutiny to guarantee Nigerians access to its operations.

    Some positive outcomes have been achieved in the past two years. Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke said the Nigerian Content implementation has attracted foreign direct investments worth over $500million in the manufacturing of equipment components for the oil and gas industry.

    The minister spoke at the opening ceremony of the Practical Nigerian Content in Yenagoa, the Bayelsa State capital. She said the equipment components manufacturing initiative is an effective way to drive industrialisation of the economy, adding that the initiative has already created over 1,000 skilled jobs.

    Mrs. Alison-Madueke, who was represented by the Permanent Secretary, Ambassador Abdulkadir Musa, explained that the initiative which mandates original equipment manufacturers to partner with their representatives to set up facilities to manufacture or assemble equipment components in Nigeria, will also ensure the retention of spend within the economy on critical industry equipment, such as valves, pumps, electrical and instrumentation products.

    She expressed confidence that the initiative will ensure that about 30 original equipment manufacturers would have set up fully in Nigeria within the next five years. She described the Nigerian Content Act as the most important development in the Nigerian oil and gas , noting that the impact of the Act is being felt in several sectors of the economy.

    She said: “Nigerians now own land, swamp, jack up rigs and some proportion of deep offshore rigs. More Nigerians are acquiring anchor handling tugs, dynamic positioning platform vessels, line handling tugs and other larger vessels otherwise called category two vessels.”

    The Minister directed the Local Content Board to lead the industry to establish vessel and rig maintenance facilities so that the Nigerian economy will realise maximum economic benefits from asset ownership.

    In training and employment, Mrs. Alison-Madueke indicated that the Board has also introduced guidelines that will ensure that investments in the industry lead to employment generation and training opportunities.

    She said: “In the last two years, over 5000 Nigerians have been provided training and employment opportunities under the project based training scheme of Nigerian Content Development and Monitoring Board (NCDMB),” adding that the developments has always impacted other sectors of the economy.

    Also, the Nigerian National Petroleum Corporation (NNPC) has pledged to partner with the NCDMB in the oil and gas industry to ensure that the 70 per cent target set by the Federal Government, especially in the complex deep offshore operation is attained..

    The Group Managing Director, Andrew Yakubu said the participation of Nigerians in the industry, especially in the upstream sector, has substantially increased from a merger 10 per cent before the enactment of the law to more than 30 per cent, citing the recent USAN Deep Offshore Field development as one significant milestone in this respect.

    He said: “These percentages are even higher and in some cases have attained 100 per cent. The Utorogu Gas Plant Expansion Project, is an example,” he stated.

    The GMD listed other projects with high local content value to include the OB3 Pipeline Project, Escravos Lagos Pipeline Phase 2 and the Aba Depot and Okirika Jetty Rehabilitation Project.

    He explained that windows of opportunities to grow Nigerian Content exist in the upstream, midstream and downstream segments of the oil and gas value chain.

    Yakubu advised Nigerians to set up medium sized companies in both exploration and production in areas like well services engineering, measurement, mud and logging engineering services.

    He said the monetisation of the country’s natural gas endowments presented other opportunities for growing local content, just like the revamping/rehabilitation of existing downstream infrastructure, adding that the enactment of the Nigerian Content Law has positively impacted on the sector. He said the passage of the Petroleum Industry Bill will further enhance benefits from the Nigerian Content Act.

    Speaking during the signing of the MoU, the Executive Secretary of NCDMB,Ernest Nwapa, said the service companies would now be required to submit a pupilage programme committing to employ Nigerians as a precondition for participation in tenders.

    He said: “To qualify to play in the industry, you must demonstrate that you are running an employment programme. Companies will employ young Nigerians and put them through pupilage before the contracts are awarded, so they can work when the contract is awarded.”

    Nwapa explained that PETAN was chosen for this programme because its members were the most enterprising players in the service end of the sector and they were partnering voluntarily with NCDMB on the programme.

    He added that the Petroleum Technology Development Fund (PTDF) will also be involved in the programme.

    The availability of sufficient skilled labour to support the growth of the oil and gas industry continues to be of concern and hence a high value-adding priority in the local content act. The areas of greatest concern are in the supply of trades and skilled labour for building new projects and supply of adequately trained and experienced technical staff to operate new and existing projects over the longer term. Nwapa said the board is committed to providing full and fair opportunity to local suppliers.

    These include processes for identifying industry capability and for working with suppliers to enhance their competitiveness and maximise their participation. The industry, government and training providers have made a solid start at developing a suite of measures for responding to the expected growth in the industry’s skilledlabour requirements. However, much remains to be done in developing and implementing a number of these programmes.

     

    Challenges

    Some of these obstacles include the lack of capacity, in terms of human resource and infrastructure, to meet the challenges in the industry which is capital intensive, requires a great deal of infrastructure and a highly skilled labour force.As new projects have started construction, expectations have risen as to the volume of work likely to flow to local industry. Delays to contract awards or disappointment at not winning work considered to be within the capability of local companies, have prompted criticism of the industry and generated calls for government intervention.

    The phase of industry growth provides the opportunity for suppliers of goods and services to the resources sector to grow their businesses. However, suppliers need to ensure that they are internationally competitive and understand and meet projects’ requirements for cost, schedule and deliverability. Suppliers face the same cost pressures and skilled labour shortages as project proponents and are further disadvantaged by the high dollar.

     

    Funding

    One of these challenges is that local businesses servicing the oil and gas industry require a sound capital base because of the capital intensive nature of the industry. However, many local companies may not be in the position to afford this and the only way out is to source funding from banks which could affect the quality and efficiency of goods and services provided. Another option is to partner foreign companies to boost their financial capabilities but this will in a way defeat the purpose of the policy itself which seeks to encourage indigenous businesses to take up the challenge of providing goods and services for the oil and gas industry.

     

    Prospects

    The NCDMB and the Petroleum Technology Association of Nigeria (PETAN) has signed a Memorandum of Understanding (MoU) that will make creating employment for young and qualified graduates part of the conditions for winning oil and gas contracts.

    The two organisations signed the agreement dubbed-NCDMB-PETAN Capacity Building Internship Programme during the opening ceremony of the conference in Yenagoa.

    Nwapa signed for the Board, while PETAN Chairman, Mr Emeka Ene, signed for the service companies association.

    Under the MoU, PETAN companies will make commitments in the form of plans that they will recruit Nigerian graduates.

    The NCDMB will issue certificates to the service companies on receipt of the plans and the commitments will count alongside other variables in the evaluation of bids by service companies for industry contracts.

    Thereafter, NCDMB and PETAN will recruit qualified Nigerian graduates and expose them to various training and skills development workshops and on-the-job training to prepare them to work in the course of the contracts and gain employment.

    PETAN companies will then absorb the trainees once they win the contracts and retain them after the internship phase based on their performance.

    Part of the MoU reads: “PETAN Companies will recruit qualified Nigerian graduates as trainees attached to a contract for a period of one year.

    “PETAN companies will absorb the candidates after the programme based on their performance and available vacancies.”

    Growth in gas demand is being matched by equally strong growth in the gas resource base.

    Unconventional gas resources are now estimated to be as large as conventional gas resources .

    Investment in other forms of unconventional gas is gathering pace, made possible by new developments in technology.

  • Stakeholders seek coordinated regulation

    Stakeholders have called for coordination in the regulation of practices in the oil and gas industry so as to engender the needed growth.

    They made the call at the PSRG-Richardson Health, Safety, Security and Environment (HSSE) forum held in Lagos.

    The forum noted that the establishment of various regulatory agencies who are working at cross-purposes was not in the best interest of the industry.

    It therefore suggested that the Department of Petroleum Resources (DPR) be adequately equipped and empowered to effectively perform its regulatory functions in the oil and gas sector.

    The forum also recommended that a division of the Nigeria Police Force, which is to be dedicated completely to the oil and gas industry should be created and well equipped to enhance security of operations, installations and assets.

    In his presentation entitled: “HSSE: Confronting the Challenges in the Nigerian Oil and Gas Environment,” Emiy Ikuru, Managing Director of Foisi Global Investment Ltd urged the development of a measurable and sustainable HSSE management system in the oil and gas industry. He called for the implementation of a security policy that meets the challenges of increasing crime and effective response strategies to emergencies that threaten the safety of staff, assets and the general public.

    Also speaking on the “Challenges of protecting oil and gas industry assets: An operator’s perspective,” Capt. Albert Oti (rtd) said an effective approach to pipeline protection would involve local communities in guarding the pipelines. It will also require the deployment of technology such as sensors, which are globally used to monitor pipelines.

    On the types of security breaches and threats prevalent in the Nigerian oil and gas industry, he listed them to include facility vandalisation, armed attacks on personnel and installations, kidnapping and hostage taking and the disruption of operations. Others are community protest action, crude oil theft and illegal bunkering, cyber crime and electronic infractions.

    To address these challenges, Oti urged operators to develop an effective oil and gas infrastructure protection strategy and acquire risk assessment and warning capabilities. He said there is the need for an integration of information sharing and control in the security of oil and gas infrastructure between operators and relevant security agencie.

    Head of HSE at the Department of Petroleum Resources (DPR), Dorothy Bassey,who was represented by Ijeoma Onyeri, spoke on approaches to sustainability in her paper entitled: “Developing a winning formula for sustainability in the oil and gas industry.

    She listed innovation, transparency, taking responsibility and maintaining standards as some of the key elements required to develop a winning and sustainable business in the oil and gas industry.

  • Tackling challenges to stable power supply

    Tackling challenges to stable power supply

    With deteriorating generating capacity and high inefficiencies, the nation’s electricity system (generation, transmission, and distribution) is under stress, requiring urgent measures to ensure that the electricity demand is commensurate with growth, DANIEL ESSIET reports.

    As the economy grows, so is the demand for electricity, which has surpassed the capacity of the current electricity generation levels.

    Across the country, power shortages have become the norm with some areas barely receiving 12 hours of electricity supply. In the wake of massive blackouts, half of the country’s population have been left without power. This is attributed to technical challenges that prevent sufficient volumes of electricity from being delivered to end-users. The challenges span across the entire power system value chain: from insufficient capacity to large losses in the transmission and distribution networks.

     

    NIPP

    Speaking during the commissioning and handling over of some National Independent Power Projects (NIPP) at Ijede, Agbowa, Imota and Ipakado subjection stations in Lagos, the Managing Director of Niger Delta Power Holding Company (NDPHC), owners of Nigerian Independent Power Projects( NIPP), James Olotu said aging power plants, lack of adequate maintenance, and sub-optimal use of fuels in the power plants have reduced the share of the nation’s generating capacity that can actually be delivered to the grid. This reduction combined with the less than optimal operation of power plants have together led to reduction in the capacity of thermal power plants. The challenge with older power plants, according to watchers, is that soon, the aging turbines and components lose efficiency. This leads to a reduction in capacity output.

    Olotu said transmission and distribution of electricity through transmission lines and substations is normally accompanied with “technical losses” in the metallic lines that connect power plants to end-users. There are however, higher losses attributed to lack of rehabilitation of power lines as well as to the inadequacy in the number of substations, which are used to step up and step down voltages across the system.

    He said the distribution system is suffering from high overloads, thefts, and lack of asset and demand side management. Congested transmission paths, or “bottlenecks,” now affect many parts of the grid across the country.

     

    The Challenges

    He said monitoring is used to identify the weak points in the system, regulate power outages, and anticipate electric failures. This he explained, helps to decrease the number of technical losses and facilitates the detection of non-technical losses, consequently increasing the share of electricity produced that is actually delivered to customers. He explained that congested transmission paths affect many parts of the grid across the country.

    To address this challenge, Olotu said the project is providing 966 low voltage, completely self protected (CSP) transformers, which will be connected to the four sub injection stations to provide reliable and safe electricity to consumers. In most of the areas of the country, NIPP is deploying CSP transformers. He said a CSP transformer can protect itself from faults. The CSP technology enables the transformer to protected it from over loading and lightning.

    He said the project is prepared to provide adequate transmission infrastructure to supply reserve margins and operating capacity that are an important part of the national reliability plan.

    Olotu said the project is providing service wires and poles to help the Power Holding Company of Nigeria(PHCN) expand the distribution to meet population and demand growth.

    The NIPP is gradually increasing the total power distribution capacity in Lagos towards lightening up the entire state as well as the adjoining state of Ogun.

    With these developments, he observed that power will be more stable in the covered areas in the states, there would be reduction in low current, load shedding, and improvement in the quality of power base and distribution along with its multiplier effects on other strata of life and the economy.

    The NDPHC boss also pointed out that the issue of gas supply had become very challenging though it was being addressed from the highest quarter.

    Olotu insisted that these were parts of the challenges and NDPHC was dealing with now in order to deliver to the nation the required quantity of power in the nearest future. Noting that Nigeria was a growing nation with the current population of 160 million people and a growing economy, he said power generation, transmission and distribution are projects that will continue to receive attention and will be improved upon.

    To improve power supply in the country, Niger Delta Power Holding Company (NDPHC) said it will continue to commission new projects every month across the country until the end of this year. He assured Nigerians that Omotosho Power Plant Phase ll is ready to contribute additional 500 megawatts to the national grid by December. Olotu said Unit 3 out of the four units in Omotosho is ready contributing about 375 megawatts into the national grid while the last unit would come on stream by December to make 500 megawatts.

    He said on-going successes recorded in the NIPP power project was in line with the transformation and power sector reform agenda of President Goodluck Jonathan administration.“I have been assured by the contractor handling the projects that the 500 mega watts will be available by December to the national grid. At present, three units, which are 1, 2, and 3 are generating about 375 mega watts are on the grid, while the last unit 4 would come on stream by December,’’ he said.

    The NDPHC, however, expressed satisfaction on the total level of commitment of the contractors handling the ongoing-NIPP projects in Omotosho.

    He said that with the level of work in all NIPP projects, the country is expected to get about 1, 500 megawatts from NIPP to contribute to the national grid by December, which is subject to available of gas.

    Olotu said that some units are not working due to non-availability of gas, adding that they have been assured availability of gas by NGC.

    The NIPP boss said that about 300 million standard cubic feet of gas has been promised by NGC to be available to the power plants by December, which he said will go a long way to boost Omotosho power plants generation.

    It will also be recalled that last the week about 1,214 self protected transformers had been handed over to the management of both Eko and Ikeja Electricity Distribution Company by the NDPHC for effective power supply in Lagos.

    A breakdown of the commissioned transformers revealed that Ikeja Electricity Distribution Company got the lion share of 966 while EkoElectricity Distribution Company received 248.

    Olotu, who participated at the event held in Lagos said that about22,500 of such micro transformers will be commissioned before theend of this year across the country to boost power delivery and reducetechnical power loss.

    The NDPHC boss, who declined to name the cost of the project, said it is a nine in one contract spread throughout the nation .He added that three of such projects have been completed in the country. He said that the transfer, which was designed to eliminate technical loss of power during transmission and distribution to end users waspart of government gesture of adding value to the privatisation of thepower sector.

    The Chief Executive officer of Eko Distribution Company of NigeriaEngineer Oladele Amuda, who spoke while participating at the ceremony in Mushin suburb of Lagos where 248 transformers was located,commended President Goodluck Jonathan, Vice-President Nmadi Sambo, the Management of Niger Delta Holding Company and the contractors for the completion of the Project that will reduce technical loss as well boost power delivery to end users in the area.

    The Chief Executive Officer, Ikeja Distribution Company, Chris Akamnonu, who spoke at the ceremony at Ikorodu suburb ofLagos where 966 transformers was installed, also commended Federalgovernment for taking the bold initiative of reducing technical lossand boosting of power delivery to the end users in the area.

    The Management of NDPHC handed over two drums ofservice wires for power distribution to Management of Ikeja Distribution firm for distribution of power to end users.

     

    Conclusion

    For followers of events in the energy sector, the crisis in the region adds urgency to the timeframe for transitioning to a more sustainable energy future. Also, because energy infrastructure tend to have a life-span of at least a half a century, the government need to develop alternative energy sources — along with production and distribution systems — at a scale that serves millions of people every day, in perpetuity.

    The nation is woefully under-spending on research to support renewable energy and a sustainable energy future. Since the roadmap is needed to address the daunting energy challenges of the 21st century, programmes should be designed to solve basic energy research problem, support transformational energy technologies and businesses, and develop cross-cutting centres of energy excellence focused on moving technologies from the concept to commercialisation phase. As the year draws to an end, expectations are high from electricity consumers.

    Recently, Vice-President, Namadi Sambo ordered the speedy evacuation of power generated from the various power stations to ensure constant electricity supply across the country. He commended the current 4,200mw of electricity being generated by power plants in the country.

  • ‘Banigo’s kingship’ll enhance Brass LNG project’

    The inauguration of renowned banker, Ebitimi E. Banigo, as paramount ruler of the Okpoama Kingdom in Bayelsa State, will not only remain topicical for a long time but also quicken the completion of the multi-billion dollar Brass Liquefied Natural Gas (Brass LNG) project.

    Installed as Okpo XXl and the Amanyanabo of Okpoama Kingdom, one of the host communities of Brass LNG project, Banigo, according to industry operators, came at an auspicious time in the life of the project.

    As a boardroom guru and entrepreneur, the operators said he would not only boost the project but will usher in a new lease of life for the people of the Kingdom.

    With him at the inauguration was another key personality that will assist in successful execution of the project, a former Governor of old Rivers State and frontline leader and the paramount ruler of another host community of the project, Twon Brass, Amanyanabo Alfred Diete-Spiff.

    At the event was the Chairman of the Brass LNG Limited, Dr. Jackson Gaius-Obaseki. He expressed joy with the installation of Banigo as monarch, saying as a boardroom player, the monarch would, no doubt, strive to ensure a peaceful environment for business operation, which would be a catalyst to a successful execution of the project.

    Gaius-Obaseki, who is a a former group managing director of the Nigerian National Petroleum Corporation (NNPC), said the visit of President Goodluck Jonathan to the island to witness the installation of King Banigo was a testimony of the commitment of his administration to a successful execution of the project.

    He said Brass Island could be the commercial gateway to Bayelsa State and expressed confidence that when completed, the project would offer job opportunities to hundreds of indigenes of the community and the state.

    The Final Investment Decision (FID) on the two-train, 10 million metric tonnes per year project has been scheduled for the first quarter of next year, which Gaius-Obaseki confirmed at the company’s Eighth Annual General Meeting (AGM) in Abuja.

    The Nigerian National Petroleum Corporation (NNPC) holds 49 per cent equity in the company, and plans to divest about 30 per cent from it out of which five per cent will go to the Bayelsa State Government, while LNG Japan would take four per cent, Itochu Corporation, three per cent, and a joint venture between Nigerian indigenous company Sahara and France-based Sempra Energy would hold two.

    American oil group, Conoco Phillips, which is divesting its interest from Nigeria, French giant – Total and Italian company, Eni, hold 17 per cent stake apiece in the project.

    Under the Shareholders’ Agreement, the NNPC cannot divest its equity in the project until an FID has been taken; and towards the realisation of this (FID), a crucial meeting of the Board was held earlier last week. At the moment, efforts are in top gear to make sure that the FID was realised.

    Earlier, the Chairman of Okpoama Kingdom Council of Chiefs, Chief Wapaobinyo Amade-Obasi, noted that the coronation signals a transformation of the kingdom with its proud heritage into a world class global economy.

    In his address, Banigo pledged to work for the common good of the people. He noted that the kingdom is poised to provide the enabling environment for well-meaning investors to harness its abundant resources with a view to becoming an industrial hub especially in the gas and oil sector.

    King Banigo, who praised the efforts of President Jonathan and governors of flood affected states for alleviating the sufferings of internally displaced persons, also thanked those who contributed to the success of the event.

  • Challenges before new owners of PHCN

    Challenges before new owners of PHCN

    A new era beckons in the power sector as new companies prepare to take over the electricity distribution companies being privatised by the Federal Government. For watchers, the issues facing the power sector are complex, dynamic, and frequently inter-related. DANIEL ESSIET looks at the challenges before the new operators

    The move to restructure the electricity distribution market and make it more competitive have led to emergence of new players in the field. Consequently, the sector will be moving into an era that will be marked by rapid technology change targeted at improving service delivery.

    Speaking with The Nation, the President, Nigerian Association of Energy Economists (NAEE), Prof Adeola Adenikinju, said the outlook for the supply of electricity has not been positive. So, he sees privatisation as a big step forward to improve power sector’s performance. He said the reforms have provided opportunities, which includes better ways to serve customers, greater customer satisfaction, improved reliability and new revenue streams.

    As new operators takeover, Nigerians expect sufficient supply of power to meet demand for years to come. Nevertheless, Adenikinju said sustaining and enhancing the adequacy of the power supply requires attention to an array of factors such as natural gas and aging infrastructure. With various components of the power system requiring upgrade or replacement, he said efforts will have to be made to address this pressing concern. Much of the power system infrastructure problems are legacy issues and the strategies for addressing aging infrastructure are aimed at supporting current and future needs.

    Adenikinju said the transition expected in the electricity market in the coming years presents a massive challenge to all parties and stakeholders involved in it. Critical challenges, he said would arise from specific issues that affect the regulation of electricity markets from a regulated to liberalised sectors. There are concerns such as security of power supply as well as boosting transmission corridors to provide adequate solutions.

    According to him, tackling these challenges, need to be handled in the most efficient manner. He noted that the transmission system is aging and many facilities will require replacement. In most areas, older, higher cost plants are used to produce higher levels of output. The maintenance costs and lost time for maintenance of older plants are also higher. Consequently, the output of electricity in the short run is accompanied by rising marginal costs. He noted that the nation will need to make increasingly larger sacrifices to radically restructure its electricity market in a manner consistent with world best practices.

    While watchers expect the private operators to play a significant role in shaping the electric power industry, the concerns are that the government needs to upgrade and expand high-voltage transmission facilities, protect and enhance environmental quality and improve energy efficiency. The cumulative effect of these initiatives has the potential to impact power system reliability as well as electricity market dynamics. According to him, a modernized transmission system will make better use of statewide generating resources and enhance access to power resources.

    Adenikinju said that the development of new demand response resources and addition of generation and expansion of transmission will contribute to a more reliable power system.

    For watchers, the issues facing the electric system are complex, dynamic, and frequently inter-related. Nonetheless, the production of electricity from natural gas has grown dramatically. Power plants fueled by natural gas are vital elements of the electric system and their roles are expected to grow.

    On a cautionary note, as dependence on natural gas for electric generation increases, the impact of natural gas supply on electric system reliability and power costs will also grow. For instance, disruptions in natural gas supply can affect the ability of gas-fueled generation to provide power, which could impact electric system reliability. While experts foresee a need for new resources to replace retiring units, project financing remains a hurdle for generation projects. The outlook for return on investment is also unclear.

    Adenikinju urged the government and stakeholders to commit resources to help ensure a bright energy future for the nation.

     

    Congestion challenges

    Operators need to address transmission congestion, including new or upgraded transmission, additional generation, or demand-side measures. Transmission congestion results from physical limits on how much power high-voltage lines can reliably carry.

    Solutions to congestion may include building or upgrading existing transmission, building additional power supply resources in close proximity to an area needing supplies, or reducing the demand for power in the areas downstream from congested lines.

     

    Distribution challenges

    While interconnected, the power grids serving various regions of the country don’t reflect differences in geography, climate, reliability requirements, and available power resources. Where the various regions interface, the differences create seams in the overall fabric of the grid that can lead to market inefficiencies and inhibit efficient coordination of grid operations.

     

    Customers

    They need to allow electricity consumers, suppliers, and service providers to participate in all types of price-based demand response programmes. What Customers want is value-added energy services such as consumption information, consumption controls (load shifting), demand response, higher reliability, and energy bundles).

    The Director-General the Bureau of Public Enterprises (BPE), Ms. Bolanle Onagoruwa, once noted that the objectives of the privatization of the power distribution companies include improving efficiency by increasing collections, reducing technical/non-technical losses, reducing costs as well as increasing access to electricity. Others include improving infrastructure through private sector investment, ensuring fair tariffs to all end-users, increasing commercial viability of the power sector, and improving customer service.

     

    Renewable energy sources

    Overall, restructuring in the electric power industry will stimulate demand for natural gas and that rising demand will lead to higher wellhead prices as the discovery process progresses from larger and more profitable fields to smaller, less economical ones. The restructuring will have a significant impact on crude oil production because petroleum-based generation is a big share of overall electricity generation. Unless required by the Federal Government, the restructured electricity market is not projected to stimulate renewable energy technologies. If policies require increased use of renewable energy, average electricity prices will increase slightly. Biomass, wind, and geothermal would be the most likely technology choices for expanded use of renewable energy.

  • Clarke frets over Petroleum Industry Bill

    Elder statesman Chief Edwin Clarke has said certain issues, which the newly revised Petroleum Industry Bill (PIB) before the National Assembly fails to address may end up undermining and threatening the existence of the Niger Delta if not revisited.

    The former Information commissioner expressed this concern while calling for additional provision to be included in the bill to take care of these issues.

    Delivering a paper entitled: The PIB and the oil producing areas equation, at an Upstream and Downstream Oil and Gas expo in Abuja, Clarke said some of these issues centred on transparency, the environment and economic empowerment of the people of Niger Delta.

    On transparency and accountability in the oil and gas industry, Clarke said they are provided for in the bill, particularly on tendering and licensing for oil blocks still fall short of what is required.

    He said: ”The process of licensing and tendering in the oil industry is still not transparent enough even with the new PIB. I would have wanted the process to be made more open so that the owners of the oil blocks are made public. Such transparency will curb the corruption in the industry as well as increase the revenues accruable to the Federal Government. We need to have a competitive and open licensing and tender process for all the oil blocks and marginal fields as well as in the associated processes for granting licenses for crude oil lifting and other downstream activities. This I think would ensure better returns to the government.”

    On protection of the environment, Clarke said what the new bill makes provision for is still a far cry to what is required for the mitigation of the level of degradation done to the environment.

    Clarke said: “The damage done to the environment via oil and gas operations by the oil companies has been quite enormous and as a result something ought to be done either to reduce or stop the damage .The current issues of environment need to be addressed by putting in place measures to stop the activities of these oil companies that are destroying our environment and ecology. There is far less than the provision in the bill can offer. But an additional provision in the new bill would ensure that these measures are implemented in such a way that there are significant consequences for any organisation that continue to violate the law. The clean up and remediation activities must start in earnest while gas flaring and persistent repeated pollution must be made to stop.”

    On empowerment of the people of the region, he noted that the new bill still leaves much to be desired, particularly on engaging Niger Deltans as stakeholders in the oil industry.

    “There are still issues with the provision of the new PIB especially as it concerns the economic empowerment of the Niger Deltans. It would be good we have a quota system that measures the participation of Niger Delta indigenes in the organisations involved in the petroleum sector in the region including the IOCs, NNPC and indigenous oil companies. The new regulatory bodies proposed by this bill should also be subject to similar Niger Delta content requirement.”

     

  • ‘Banigo’s kingship’ll enhance Brass LNG project’

    ‘Banigo’s kingship’ll enhance Brass LNG project’

    The inauguration of renowned banker, Ebitimi E. Banigo, as paramount ruler of the Okpoama Kingdom in Bayelsa State, will not only remain topicical for a long time but also quicken the completion of the multi-billion dollar Brass Liquefied Natural Gas (Brass LNG) project.

    Installed as Okpo XXl and the Amanyanabo of Okpoama Kingdom, one of the host communities of Brass LNG project, Banigo, according to industry operators, came at an auspicious time in the life of the project.

    As a boardroom guru and entrepreneur, the operators said he would not only boost the project but will usher in a new lease of life for the people of the Kingdom.

    With him at the inauguration was another key personality that will assist in successful execution of the project, a former Governor of old Rivers State and frontline leader and the paramount ruler of another host community of the project, Twon Brass, Amanyanabo Alfred Diete-Spiff.

    At the event was the Chairman of the Brass LNG Limited, Dr. Jackson Gaius-Obaseki. He expressed joy with the installation of Banigo as king, saying as a boardroom player, the monarch would, no doubt, strive to ensure a peaceful environment for business operation, which would be a catalyst to a successful execution of the project.

    Gaius-Obaseki, who is a a former group managing director of the Nigerian National Petroleum Corporation (NNPC), said the visit of President Goodluck Jonathan to the island to witness the installation of King Banigo was a testimony of the commitment of his administration to a successful execution of the project.

    He said Brass Island could be the commercial gateway to Bayelsa State and expressed confidence that when completed, the project would offer job opportunities to hundreds of indigenes of the community and the state.

    The Final Investment Decision (FID) on the two-train, 10 million metric tonnes per year project has been scheduled for the first quarter of next year, which Gaius-Obaseki confirmed at the company’s Eighth Annual General Meeting (AGM) in Abuja.

    The Nigerian National Petroleum Corporation (NNPC) holds 49 per cent equity in the company, and plans to divest about 30 per cent from it out of which five per cent will go to the Bayelsa State Government, while LNG Japan would take four per cent, Itochu Corporation, three per cent, and a joint venture between Nigerian indigenous company Sahara and France-based Sempra Energy would hold two.

    American oil group, Conoco Phillips, which is divesting its interest from Nigeria, French giant – Total and Italian company, Eni, hold 17 per cent stake apiece in the project.

    Under the Shareholders’ Agreement, the NNPC cannot divest its equity in the project until an FID has been taken; and towards the realisation of this (FID), a crucial meeting of the Board was held earlier last week. At the moment, efforts are in top gear to make sure that the FID was realised.

    Earlier, the Chairman of Okpoama Kingdom Council of Chiefs, Chief Wapaobinyo Amade-Obasi, noted that the coronation signals a transformation of the kingdom with its proud heritage into a world class global economy.

    In his address, Banigo pledged to work for the common good of the people. He noted that the kingdom is poised to provide the enabling environment for well-meaning investors to harness its abundant resources with a view to becoming an industrial hub especially in the gas and oil sector.

    King Banigo, who praised the efforts of President Jonathan and governors of flood affected states for alleviating the sufferings of internally displaced persons, also thanked those who contributed to the success of the event.