The Nation Newspaper

Category: Energy

  • Marketers, retailers decry increasing price of cooking gas

    Liquefied petroleum gas (LPG), commonly called cooking gas, is abundant in Nigeria. But it is not easily accessible to consumers as it should be. Also, the price of LPG that should be cheaper in view of the abundant reserves of natural gas it is not. Local price is always determined by happenings overseas and the international market. LPG marketers, under the aegis of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), and retailers, under the umbrella of the Liquefied Petroleum Gas Retailers (LPGAR), a branch of Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), have cried out, saying cooking gas is getting out of reach of consumers. To them, winter and other weather conditions overseas and international price index should not determine the price of a product Nigeria has in abundance, EMEKA UGWUANYI reports.

     

    Members of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) are not happy with the increasing price of liquefied petroleum gas (LPG) also called cooking gas.

    The marketers, reacting to the unwarranted price hike of the product, noted that this is happening despite concerted efforts of the government and stakeholders to deepen the use of LPG in the country.

    NALGAM Executive Secretary, Mr. Bassey Essien, in a document by the group, said at this time of the year in the past, price hikes used to be attributable to winter and increased demand for heating energy and international price index. ‘’We have consistently questioned why a product in abundance in our country should become a victim of issues occurring internationally,’’ he said.

    He said within the last one week, LPG price has soared and markerters did not know the cause. The price hike would dovetail into consumers paying more for the product. The consumers would blame marketers who are also caught up in the price hikes, Essien said.

    Within five days, the price of a 20-metric tonne (MT) of LPG, which  sold for N3.15 million, jumped to N3.5 million, N3.9 million and within a few hours moved to N4.2 million, despite that the product has been in the storage of the terminals when the price was even sub N3.5 million, so why the sudden upsurge? he queried.

    According to him, efforts to know the cause of the price increase from the terminals were futile.

    At one of the terminals, there was a denial of any price increase. The head of LPG Sales at the company said the company had no stock, but when asked to explain the increase to N4.2 million, when the company had no stock, he was evasive. Some marketers, who had paid for LPG when it was N3.45 million and were awaiting loading were being intimidated with refund of their money except they agreed to pay the difference despite having tied down their funds without loading their trucks.

    At another terminal, it was attributed to the interplay of forces of demand and supply; and in this case demand had outstripped supply. Elsewhere, importers have also attributed low supply to delay in accessing foreign exchange from the Central Bank of Nigeria (CBN), which accounted for delayed payments to their business associates thus, the inability to oil the LPG supply cycle.

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    Essien said: “The Association is hereby disassociating itself and members from the antics of the current price hike and therefore, maintaining that the price increase is not the handiwork of marketers but rather that of the terminal owner, importers and the Nigeria Liquefied Natural Gas (NLNG). Marketers are bemoaning the situation as the development has adversely affected business planning.

    ‘’If the trend is not halted immediately, the price of a 12.5kg cylinder of cooking gas may soon sell for over N6, 000 and well out of the purchasing power of the average consumer.

    “This brings to question when the issue of product availability will ever be holistically addressed. We cannot deepen the use of LPG if availability of the product is not guaranteed.

    “In the immediate need to reverse the price hike, we are calling on the NLNG to: flood the market with cooking gas since they have the capacity to do so; increase the frequency with which the vessels delver LPG from Bonny to the terminals; importers to free the PPMC Depot in Lagos for the delivery of NLNG product allocation; NLNG should supply LPG to other coastal terminals outside Lagos to reduce the inherent pressure on the terminals in the Southwest; and NLNG should deploy vessels of smaller capacities to access the coastal terminals if product availability must be achieved.”

    On their part, members of Liquefied Petroleum Gas Retailers (LPGAR), a branch of Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), in a statement noted that the arbitrary increment in price of LPG and supply shortages is embarrassing especially for a country like Nigeria with abundant gas reserves.

    The Branch Secretary of LPGAR, Comrade Olukayode Aborisade Solomon, said LPGAR branch of NUPENG is highly dissatisfied with sudden upsurge in price of liquefied petroleum gas (LPG) by tank farm (LPG depots) operators and what appears to be a deliberate reduction in supply or rotation of supply amongst the tank farms.

    These, the group said, had led to about 90 per cent increment in gas price within a space of one week. It is likely that this ugly situation will continue if there is no urgent intervention, especially as Christmas and New Year approach.

    “Though the increment began about a month ago but did not significantly reflect in the price sold to end-users because retail outlets had absorbed the difference believing it would soon normalise.

    However, without any sign of imminent supply or pricing crisis, the price in the last one week suddenly skyrocketed, reaching about 90 per cent high. Just a week ago in Lagos and some neighbouring states, 12.5kg of LPG was sold for between N2,600 and N3,000 in retail outlets. It is now sold for between N4,000 and N4500 at retail outlets, owing to sudden hike in the price by tank farm operators.

    “If this situation remains unchecked it is capable of undermining the expected development of LPG sector in the country which has been championed by the government and other stakeholders over the years.

    “Nigerians especially the low income earners who are beginning to adapt to LPG for both domestic and commercial uses are being subjected to exploitations at the time they are already being confronted with economic hardships.

    “The situation is already forcing many users to abandon their cylinders and opt for other sources of cooking energy such as firewood and saw dusk irrespective of the attendant health risks and resultant environmental degradation that results from those alternative energy sources.”

    Solomon said LPG retailers had to contend with end-users who often accuse them of being responsible for the increments. Unknown to most of the end-users, LPG retailers are the worst hit as they have been reduced to the status of mere agents toiling day and night to make LPG available to Nigerians often with little or no profits because of the monopoly of a cartel.

    “Our union over the years has been decrying what it views as manipulation of the sector by a few privileged individuals and business concerns in Nigeria including some multinationals operating in the oil and gas sector.

    “The people behind the business organisations benefiting from this arbitrariness are the same people that have been creating the impression within the government quarters that insufficient retail outlet in Nigeria is the problem militating against the deepening of LPG in the country. This they do to secure approvals and incentives for establishment of retail outlets to the detriment of small and medium size LPG businesses.

     

    They, therefore, neglect the major areas they are expected to concentrate which include LPG production and provision of storage facilities (tank farms).

    “If enough production or importation of LPG is made and enough storage facilities provided, LPG would become affordable and accessible to Nigerians because there are hundreds of thousands of business-minded Nigerians who are willing and ready to penetrate even the remotest villages to stimulate LPG usage and also meeting demands.

    “Our union is calling on the government and the rest of the stakeholders to urgently intervene in order to restore sanity. There is nowhere in the world that government leaves such a vital sector solely in the hands of a few commercial interests especially where there is apparent case of manipulation.”

     

  • Sahara Group lauds UNDP’s programme

    Africa’s huge economic growth potential can be harnessed through robust intra-African trade, collaboration and firm resolve to pursue shared goals, Executive Director, Sahara Group, Temitope Shonubi, has said.

    Shonubi spoke at the United Nations Development Programme (UNDP) “High Level Dialogue” in Accra, with the theme “Africa’s money for African Development, a Future Beyond Aid.

    He said Africa needs to look beyond dependence on foreign aid and embrace the pursuit of economic growth and development as a “single entity with common interests, goals and aspirations”.

    According to Shonubi, “It is Sahara Group’s firm belief that African businesses can be the greatest contributors to Africa’s success. But tackling some of the toughest global challenges cannot be achieved by any one company or sector alone. We, therefore, need to partner, not merely in business, but in building the better, stronger and more economically vibrant Africa that we all desire.”

    He noted that Sahara Group’s experience across the continent had shown that intra-African trade can be enhanced through uniform trade policies, shared infrastructure and technology, ease of movement of persons and goods and transparent regulatory framework for different sectors.

    He said: “As a leading energy conglomerate on the continent, Sahara Group has continued to champion calls for increased trading activities on the continent, especially in the energy sector. Sahara Group has at different fora canvassed more collaboration and businesss involving African entrepreneurs, oil and gas businesses, traders and financial institutions, among others.  Sahara is one of the first African companies to regularly carry out full cycle crude and product transaction using only African resources.”

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    The event was chaired by Ghana’s President, Nana Akufo-Addo, who reiterated widely-held expectations that the African Continental Free Trade Agreement (AfCFTA) will facilitate a new wave of economic prosperity if implemented successfully.

    Akufo-Addo also noted the need for African economies to become independent of aid, adding that upholding human rights, the rule of law and democratic accountability are key ingredients for sustainable development.

    AfCFTA commits countries to remove tariffs on goods, progressively liberalise trade in services, and address non-tariff barriers. As of the end of 2018, Intra-African trade made up only 15 per cent of the total trading activities by the continent. Successful implementation of the agreement is projected to create one African market of over a billion consumers with a total GDP of over $3 trillion. This will make Africa the largest free trade area in the world.

    UNDP’s Director for Regional Bureau for Africa, Ahunna Eziakonwa, said the ‘dialogue’ will be positioned as an ongoing platform to inspire a global audience to recognise the opportunities for Africa’s future prosperity.

    The platform also seeks to increase thought leadership about Africa’s development towards self-sustaining futures, provide intellectual and analytical insights for the new AfCFTA, as it advances towards African Union’s Agenda 2063 and global goals in Agenda 2030, raise visibility and create momentum supporting Africa’s vision for future prosperity and foster new partnerships and create alliances for Africa’s transformation agenda.

     

  • Group honours Shell for youth development

    The Anglo-Dutch oil giant – The Shell Petroleum Development Company of Nigeria Limited (SPDC) has been honoured for providing opportunities to talented secondary school pupils in the Niger Delta to participate in the United Nation’s Model Conferences in the United States.

    Founder and Country Director of Future Trust Initiatives, Dr. Maureen Egbuche, announced the award at the Second African Future Trust Model United Nations Conference in Port Harcourt.

    “It is truly long overdue for society at large to appreciate all Shell’s strategies at securing the future for our younger generations,” Egbuche said.

    According to her, “Shell’s Environmental Conservation Clubs and the Sustainable Development Club laid the foundation for students’ participants in the United Nations Model Conference, USA, a simulation of real life UN sessions by student delegations from around the world.”

    Namibian High Commissioner to Nigeria, Mr. Humphrey Geiseb, presented the award to SPDC’s General Manager, External Relations, Igo Weli.

    Read Also: SBI Media Group, boss bag multiple awards at MWA 2019

     

    Weli said: “We are glad that our programmes have enabled young people from Nigeria to showcase their talents to the world. Here, in Nigeria, Shell has been at the forefront of commitment to Nigeria’s economic and social development for over 61 years and we continue to show belief in the Nigerian project, supporting the development of the Nigerian people.”

    For six decades, Shell Companies in Nigeria have continued to deliver a suite of youth development programmes in education, sports and entrepreneurial and skill acquisition, he said.

    Apart from scholarship for secondary, graduate and post graduate studies in Nigeria and overseas, Shell Companies support schools by donating ICT centres, libraries, laboratories and school buildings among others, he added.

    They are also leaders in sponsoring and promoting sports. For 20 years, they have promoted and sponsored the NNPC/Shell Cup, a championship that has helped to identify and develop young talented footballers in secondary schools, some of whom have played in the Nigerian national teams, Weli said.

     

  • Ending incessant output shortfalls

    The power sector seems to be passing through one of its worst moments as some generating plants were shut due to gas shortage. The development is having grave consequences on the sector as it cannot boost output to remove the strain on the economy, writes AKINOLA AJIBADE.

     

    Recently, 10 of the 27 power generation plants in the industry were shut due to lack of gas supply. The plants were unable to add a single megawatt (mw) of electricity to the grid since they were built due to lack of access to gas.

    On September 11, the plants were declared unfit for generating electricity because they could not access gas for operation.

    Out of the 10 plants, six were built by the Federal Government under the National Integrated Power Project (NIPP) scheme, which is managed by the Niger Delta Power Holding Company of Nigeria (NDPHC), while four were owned by the government.

    The Federal Government’s objective of establishing the NIPP was to improve electricity generation and distribution.

    The plants, which were shut down are Sapele, Alaoji, Olorunsogo, Omotosho, Ihovbor and Gbarain power stations, inciuding Afam 1V &V, Ibom IPP, AES and ASCO IPP.

    Of note is the development has culminated in the reduction of electricity generated to 2,866 megawatts (mw) from 3,141mw as indicated in the report of the Nigerian Electricity System Operator (NESO).

    Prior to this period, the sector had suffered a similar setback as six of its gas-fired generation plants were shut down in June 2018. The issue, which was second of such incidents in June last year, was attributed to operational hitches, mainly shortage of gas.

    The Transmission Company of Nigeria (TCN) listed the plants as Omotosho, Ihovbor, Azura, Geregu, Olorunsogo and Egbin.

    Like others in the past, the six plants produced lesser volumes of electricity daily during the period.

    It is interesting to note that Egbin Power Plant had earlier suffered similar fate. Reputed to be largest plant in Nigeria as it contributes about 1,300 megawatts of electricity to the national grid, the plant for some time was not having enough gas for production.

    Record shows that the management of Egbin Plc, had at some point in time, struggled for gas, a development which led to shutting down some of its six turbines.

    The hydro power stations were not left out in the search for materials for production. Though the plants provide 30 per cent of electricity in the sector, they are not without their own problems, chief of which was shortage of water.

    They are Kainji, Shiroro and Jebba. Though the problems facing hydro power stations are not in the same degree like that of thermal plants, nevertheless, the plants sometimes struggle to produce optimally.

     

    Stakeholders’ views

    Expectedly, the issue of dormant turbines, which once characterised the sector, has ignited reactions among stakeholders who argued that the challenges facing the sector were systemic and regulatory in nature. According to them, the sector must look inward to solve its infrastructural problems if the industry must record growth.

    The Director of Energy Information, Centre for Energy Studies in Nigeria, Prof. Wunmi Iledare, said generating plants could become dormant once they are not getting enough gas. He observed that problems such as inactivity of the turbines and attendant poor outputs were common in recent times, adding that the problems revolve round three factors.

    The sector, Iledare said, would continue to witness cases of dead plants, until the three issues were addressed.

    Iledare said: “Three things, perhaps, come to mind when we are talking about the issue of turbines that were shut down by their owners, which may be government or the private investors, who bought the assets of the defunct Power Holding Company of Nigeria (PHCN) during privatisation.

    “The first is the issue of accessing gas to power the turbines, the second is the issue of evacuation of electricity when it is needed, while the third one is about the price of the product – electricity.

    According to him, the gas pricing regime, which was implemented years ago, by the Federal Government, favours few operators in the value chain.

    The International Oil Companies (IOCs), IIedare said, produced gas mainly for the Nigerian Liquefied Natural Gas Limited (NLNG), adding that the IOCs made a lot of money from gas exports and paid little in return for domestic users of gas, which are power generation companies.

    Read Also:  Power sector’s losses may hit N500billion

     

    He said once a fair gas pricing regime is in place, all parties involved in the production, sales and use of gas for production would benefit.

    He said when this happens, power firms would not have problems accessing gas. The power distribution firms would be able to supply electricity and shortage of gas, which affects production, would no longer arise.

    Another stakeholder, who did not want to be mentioned, attributed the issue to what he described as operational defaults. He said the issue was caused by shortage of gas, a feedstock used in generating electricity through thermal plants, adding that the problems in the power sector are interwoven in view of the fact that a problem in one unit of energy production could have a spillover effect on the entire industry.

    He said: “Basically, there are so many challenges facing the nation’s power sector. It is either the sector is not unable to access enough gas for production or the Transmission Company of Nigeria (TCN) does not have the capacity to sustain the energy given it by the generation companies, among other issues.

    “Cases abound where TCN does not have the capacity to wheel huge volume of electricity. Often times, the development leads to high frequency and the next thing to do is to shut out the plants.”

     

    Way out

    Iledare, a former country’s president, Association of International Energy Economist (AIEEl), urged TCN to expand its facility to transmit more electricity. He said when TCN enlarged capacity, it would be able to wheel more electricity to the distribution companies  DisCos.

    “The issue is simple. TCN should expand its wheeling capacity. The distribution and generation companies should also try and improve their infrastructure. Once the three key operators in the energy value chain have up-to-date facilities at their disposal, they would operate without impediments and the better for the sector.”

    Other industry stakeholders confirmed that the sector could only rid itself of problems, such as shutting down of the generating plants or poor production once TCN is well positioned to take as much electricity as possible for transmission to the DisCos.

  • No competition with Dangote, says Kyari

    By Okwy Iroegbu-Chikezie

     

    Group Managing Director, Nigeria National Petroleum Company (NNPC) Mele Kyari at the recent tour of Dangote Petroleum Refinery said the government was working to ensure that refineries came on stream as soon as possible to ensure the availability of the stock year round.

    He spoke when he toured the Dangote Petroleum Refinery and Fertiliser company famed to be eight times size of Victoria Island with the Minister of State for Petroleum Resources, Timipre Sylva.

    Responding to a question on whether there is a veiled competition between NNPC and Dangote Refinery, Kyari said: “lt is important to state that we are not competing with Dangote Refineries, rather we are complementing each other to make Nigeria a net exporter of refined petroleum products and you can’t do this until you have complementary activities that involved all stakeholders in the sector”.

    According to him, what they are doing with the refineries is to make them work so that by the time Dangote refineries come up, it will have a full accompaniment of NNPC refineries also to complete each other for the good of the country.

    The NNPC boss said it would enable the country to be a net exporter of gasoline and other associated products.

    He said: “Not only that, it is going to guarantee products security for our nation. As President of Dangote has said, Nigeria will now be the real supplier of products to Africa markets.’’

    Earlier, Dangote Group Executive Director, Strategy, Capital Projects & Portfolio Development Mr Edwin Devakumar said the Refinery will not only serve local demands which stand at 53 million litres daily but also set for export  to Europe and other parts of the world.

    Read Also: NNPC deepens downstream oil sector reforms

     

    He said gas will be trapped for electricity which is a sore point for manufacturers in addition to other by -products of the refinery used in the petrochemical industry to drive industrialisation..

    He also said that as a deliberate policy the complexity of the refinery is to ensure surplus revenue generation for the country as the company is worth over $12 billion.

    Edwin further revealed that over 800 engineers have been trained in India and employed by the organisation.

    President Dangote Group, Aliko Dangote also appealed to government to provide an enabling environment for organisations like his to thrive.

    He said the refinery will produce Gasoline, Diesel, Kerosine and aviation jet that would be surplus for export. Dangote further said:

    We believe in Nigeria and if we don’t do it, nobody will come and do it for us. You know Nigeria has population growth of three percent

    annually and there is need for Nigeria to feed itself and the entire Africa market, that’s why we went for this massive investment”, he added.

  • Operators to explore energy deficit

    Stakeholders are exploring other ways to close power supply gaps. They are looking at using liquefied natural gas (LNG) and renewable energy to address the deficit, writes EMEKA UGWUANYI

     

    Stakeholders in the renewable energy space and liquefied natural gas (LNG) subsectors are exploring ways to address the supply gaps in the power sector.

    They said there is a need for the government to make the sector attractive for investment through policies and by embracing new technologies. They noted that Nigeria lags behind Niger and Cameroon in renewable energy.

    However, they were optimistic that Nigeria will catch up with other countries when the right policies are were implemented. To them, depending on the grid supply when there are opportunities in the off-grid segment doesn’t encourage closure of the supply gaps.

    Speaking with reporters in Lagos ahead of the Future Energy Nigeria conference and expo scheduled for November 12 and 13 in Lagos, some of the stakeholders noted that there was need to advance conversations in the sector.

    The Head of Sales, East and West Africa, Clarion Energy-Spintelligent, Ade Yesufu, wants value chain overhauled for competitiveness.

    On the theme of the conference, which is “Advancing partnerships and solutions for a sustainable energy economy,” Yesufu said the event is expected to focus on the value chain and seek ways to provide solutions to the power challenges as well as empower youths for improved capacity development.

    Read Also: Unending power sector battles for loans

    Marketing Manager, Jubaili Bros Engineering, George Kai, explained that the initial cost of adopting renewable solution as well as access to funding are critical issues that are limiting the growth of renewables.

    Considering the cost of the project at the initial stage, Kai urged off-takers to explore financing options as people are sceptical about their capital expenditure.

    On how to bridge the energy gap, Pradipta K. Mitra, Market Research Specialist Greenville Liquefied Natural Gas (LNG), observed that the claim that electricity can’t be supplied nationwide would be erased when the government promotes more investment to harness LNG in Nigeria, adding that if such projects can be replicated, the power problem would gradually be solved.

    Mitra explained that LNG offers huge cost savings as against other fossil fuel products, adding that the firm is already supplying LNG to many industrial customers and noted that 200 tankers have been deployed with 100 more tankers underway.

     

    President Women in Renewable Energy Association/Former President of the Council on Renewable Energy, Mrs. Anita Okuribido, said the biggest consumers of electricity (ministries, departments and agencies) in the country are not willing to pay, adding that there is a need for smart energy delivery system in the energy value chain.

  • Six years after privatisation, power woes linger

    Six years after the Federal Government unbundled the assets of the Power Holding Company of Nigeria (PHCN) and  privatised it, uninterrupted electricity for the citizenry has remained elusive, writes Senior Correspondent AKINOLA AJIBADE

     

    Penultimate week, the country marked the sixth anniversary of the privatisation of the power sector.

    Last Friday, Nigerians woke up to witness what has become perennial in the sector – power outage and its attendant debilitating effects on not only the people, but also on the economy.

    The same scenario played out in previous editions, as the first, second, third, fourth and fifth anniversaries of the transition of the power sector from a state-owned to privately-run institution were marked by poor power supply. Not only has the sector recorded poor performance, it has also shown its unpreparedness to welcome a privately-driven power initiative.

    Before now, Nigerians were expecting an electricity industry driven by private operators. The reason was that the government has failed, by not allowing the sector to grow coupled with the fact that the sector has failed to impact on the socio-economic activities.

    The idea appeared good and capable of ending the irregular supply of electricity then. But it turned out not to be so. The situation has gone so bad that the power generation level is at its lowest.

    Records have shown that the sector, in the first quarter of the year,  generated less than 2,500 megawatts (Mw) of electricity. This is in addition to the fact that generation has been fluctuating between 3,000  and 4,500 Megawatts in the last six years, a development, which has affected the economy.

    Like a recurrent decimal, the problems in the sector, which include shortage of gas, meters, poor distribution and transmission networks, high tariffs, have continued to stare Nigerians in the face, as the government appears helpless in proffering solutions to them.

    Stakeholders argued that the problems permeate the three key areas in the sector’s value chain – generation, distribution and transmission. The subsectors are bedeviled shortage of gas, weak transmission and distribution equipment.

     

    Generation

    The sector has not been able to record appreciable output in generation of electricity. The problem is attributed to inability of the thermal plants to access gas for production, as at when due.

    The report titled: “Overview of the Nigerian Electricity Sector” showed that generation fluctuates between 1,500 Mw and 4,600 Mw between 2015 and 2017.

    The report further stated that gas, which is the feedstock  for generating electricity, has not been in constant supply. It said there was insufficient gas to power the thermal plants, adding that the development has made the plants to operate below their installed capacity.

    According to the report, “the non-completion of the Oben pipeline, and the absence of a commercial gas framework was responsible for this problem”.

    The Association of Power Generation Companies (APGC) Executive Secretary, Dr Joy Ogaji, said the problems were many. Speaking during a stakeholders’conference in Lagos,  she said generation appears to be the major problem.

    Speaking on the theme, “Harnessing oil and gas potential for national development,” Ogaji said the inability of the Federal Government to fully harness the potential in the sector has caused challenges in the industry, saying the power sector for instance, is not making use of its potential, as the sector lacks enough gas to operate with.

    The non-availability of gas coupled with its rising price has caused a big problem in the industry. The power generation companies (GenCos) were not being paid for the power they supply the distribution companies (DisCos) promptly, a development that has resulted in huge debts for the firms. She said this was having adverse effect on the output of the generation firms.

    Read Also: Reps reject N20b PHCN assets sale report

    Ogaji said the problem, which started in 2013, has defied solution. “The generation companies were owed and are not being paid as at when due. The GenCos are being owed huge amount of money, so, where will the power generation firms get money to meet their obligations to the industry?’’ she said.

    She said the failure of the key operators to fulfill their obligations has an effect on the entire industry, urging stakeholders, including the government, to help bail the sector.

     

    Distribution

    The 11 DisCos are having challenges in taking up electricity from the Transmission Company of Nigeria (TCN) and distributing it to homes, offices and industrial concerns across the country. The Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED), Dr Sunday Oduntan, said poor distribution of energy should not be put on the DisCos, adding that the DisCos only distribute what they have at their disposal.

    He said the company in charge of transmission of electricity has its blames; ditto the power generation firms. He told The Nation that the sector is sitting on a tripod – the GenCos, DisCos and the TCN (TransCo), adding that every layer  has a role to play to foster growth.

    The transmission, generation and distribution firms must not abdicate their roles one for another, if growth should be recorded. He said liquidity was a problem, which the sector requires, but lacks to provide the needed solution to record appreciable growth, insisting that until the liquidity crisis is sorted out, Nigerians would not be able to enjoy uninterrupted supply of electricity.

    He noted that the sector has been having liquidity problem before and after privatisation, noting that the issue must be resolved by the stakeholders to foster growth. The sector, he said, has liquidity crisis and shortfall of about N1.3trillion, urging stakeholders to collaborate in tackling the issue for the common good of Nigerians.

    He said the sector is bleeding, which is why the country cannot have stable power, urging stakeholders not to allow the crises to snowball into a more complex one that would spell doom for the sector.

     

    Transmission

    This has become one of the major problems that is hindering the supply of electricity. The issue is attributed to obsolete transmission equipment and lack of funding, a development, which has resulted in grid collapse.

    The Managing Director, Transmission Company of Nigeria (TCN), Mohammed Gur Usman, said the rampant cases of grid collapse and other problems of transmission of electricity started many years ago, saying the agency has imported new equipment to address the problems.

    Also, the spokesperson, Ibadan Electricity Distribution Company (IBEDC), Mrs. Angela Adekunle, said the industry has witnessed more than 100 cases of grid collapse, adding that the recent one in June affected energy distributors, including IBEDC. Consumers and stakeholders, while identifying with sector’s challenges, have come to the conclusion that the sector is almost dead, as it is unable to improve its output, years after it was privatised.  While some were said due process was not followed in the sale of PHCN and that the Electric Power Sector Reform Act of 2005 should be revisited by the Federal Government to pave way for a turnaround, others hold different views. Yet, others called for the recapitalisation.

     

    Infrastructure

    Observers said poor infrastructure has slowed the growth of the sector in the last six years, adding that when the government is able to shore up its capital, the industry would return to optimal performance.

  • Content Board, OPTS collaborate to develop marine vessels’ standards

    To ensure that marine vessels meet global industry standards and offer best service delivery, the Nigerian Content Development and Monitoring Board (NCDMB) and the Oil Producers Trade Section (OPTS) are collaborating to develop standards, writes EMEKA UGWUANYI

     

    The Nigerian Content Development and Monitoring Board (NCDMB) and the Oil Producers Trade Section (OPTS) are partnering to develop standards for  marine vessels.

    OPTS is a private industry group under the umbrella of the Lagos Chamber of Commerce and Industry (LCCI), which comprises multinationals and indigenous exploration and production firms.

    NCDMB Executive Secretary, Simbi Kesiye Wabote, disclosed this while receiving the new executives of the Shipowners Association of Nigeria (SOAN), led by the President, Dr. Mkgeorge Onyung, in his office in Abuja.

    According to Wabote, the standards will be applied in marine tenders by operators and will specify  technical specifications that must be met by marine vessels.

    The conceptualisation of the standards will have input from stakeholders and will enhance business opportunities for marine operators and stimulate capacity building, efficient maintenance of vessels and optimum service delivery, Wabote explained.

    He added that NCDMB was desirous to promote the development of shipyards and would collaborate with the shipowners or any group that would submit a bankable proposal on how to domicile that important capacity in-country.

    Responding to a request by the shipowners for the Board to relax certain conditions, which made it difficult for them to access the Nigerian Content Intervention (NCI Fund), the NCDMB chief insisted that conditions on the NCI Fund would remain.

    He clarified why the Board instituted those conditions, including the demand for Bank Guarantee from the applicant’s commercial bank, to guard against failure of the loans and the entire credit scheme. “We set tight conditions because we do not want the Fund to fail,” he added.

    He described the NCI Fund as phenomenal success, noting that 90 per cent of the funds have been accessed by oil and gas companies that met the set conditions.

    Mkgeorge Onyung, explained that the visit was aimed at familiarising the Board with the new executive of the association and seek innovative ways  the organisations could collaborate.

    He commended NCDMB for the impactful implementation of the Nigerian Content Act, which has led to the exponential growth of indigenous marine sector.  He lauded the Board for developing the revised Marine Vessel Categorisation Scheme and expressed the hope that it would lead to more industry contracts for their members.

    Onyung stated that some members of the association were working with foreign partners to start ship building and repair centres and will require support and collaboration from NCDMB.

    He declared that shipping consisted of 90 per cent of global trade and SOAN wanted to contribute its quota to national economic development, adding that the association was planning to organise a national conference and would use the forum to showcase how Nigerian Content had provided an enabling environment for shipping to thrive.

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    Other executive members of SOAN sought the Board’s intervention towards getting international oil companies to change the 10-year age restriction they placed on marine vessels that would be hired in the Nigerian oil and gas industry.

    According to them, it took an average of five to six years for a contracted vessel to break even, hence it would be unprofitable, if such a vessel is barred from working shortly after it clocked 10.

    They proposed a partnership  with NCDMB, whereby the Board would sponsor cadets to gain sea-time onboard vessels owned by SOAN members, adding that the association operated a similar scheme with the Maritime Academy in Oron, Akwa Ibom State and had 59 cadets onboard ships, with the school paying a discounted rate for the opportunities.

    The association pleaded with the Board to compel the Nigerian National Petroleum Corporation (NNPC) to use indigenous tankers for shiping of its products. They regretted that only one Nigerian  tanker was engaged by the NNPC in contravention of Nigerian Content directive.

    Wabote, however, stated the Board’s readiness to partner SOAN to provide sea-time experience to young Nigerians and charged the association to submit a detailed proposal on the idea.

    He stated that NCDMB was exploring an arrangement, whereby ExxonMobil Nigeria would deploy a training vessel as a Capacity Development Initiative (CDI). The training vessel would have extra deck spaces for cadets and operate under a sustainable arrangement.

    He also challenged SOAN to engage the Nigerian Maritime Administration and Safety Agency (NIMASA), NNPC and Nigerian Ports Authority (NPA) on some of its demands, which border on the mandate of those agencies.

     

  • Boosting laboratory best practices in oil and gas

    For safe and standard laboratory operations in the oil and gas industry, the Department of Petroleum Resources (DPR) has organised a three-day workshop for players in the sub-sector. The workshop, the third in the series, touched on all aspects of laboratory operations, including the dangers of flouting the rules, EMEKA UGWUANYI reports

     

     

    The Department of Petroleum Resources (DPR), the oil and gas industry regulator, has underscored the importance of laboratory in the oil and gas industry and the need for operators to desist from engaging in short-cuts and compromising data analyses results from laboratory tests.

    Its Acting Director, Alhaji Ahmad Shakur, who spoke at the Third Oil and Gas Industry Laboratory Stakeholders’ workshop in Lagos with the theme: ‘Enhancing laboratory best practices and capacity building towards promoting sustainable development in the Nigerian oil and gas industry,’ said the industry is a technology-driven and knowledge-based one, therefore, processes and operations should be at their best.

    Represented by the Deputy Director, Health, Safety & Environment (HSE) Division, Dr. Musa Zagi, Shakur, said the workshop was aimed at charting a new course for laboratory managers and operators and embracing best practices.

    He advised operators not to view their undertakings, or businesses as only money-making ventures but also ensure their services met global standards.

    He said laboratory practices should be seen as a critical and sensitive component, which input are vital to decision-making across the  value chain.

    “The impressive attendance to this workshop, to me, signifies the seriousness and importance that you all attach to this engagement which is geared towards continuous improvement of laboratory practice in the oil and gas industry.

    “I would like to thank the Head, Health, Safety and Environment (HSE) and his dedicated team for successfully putting this stakeholders’ workshop together. It is also imperative to ask how equipped and efficient our laboratories for conducting these scientific observations and analyses are.

    “It is my fervent hope and firm belief that the discussions in this workshop will ignite a strong determination and resolve among all oil and gas laboratory stakeholders to begin to chart a definitive and sustainable path towards uncompromised and consistent quality of service and integrity of results,” he said.

    Shakur emphasised that the quality and integrity of data or results from laboratories was critical for decision-making for regulators and operators without which there could be no real value and sustainability.

    He said the DPR had put in place machinery to ensure good laboratory practice, adding that the accreditation and permitting process for laboratory services firm had been strengthened since the workshop was first held in 2015.

    “DPR is committed to working with stakeholders to drive and enhance good laboratory practice within the sub-sector, encourage and where necessary enforce capacity building with the ultimate goal or objective of promoting sustainable development in the industry,” he added.

    At the event were chief executives of laboratory services firms, academics and representatives of oil and gas firms.

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    Various presentations identified the importance of sample collection. Sampling, according to the presentations, is fundamental and critical to the integrity of the analytical process as wrong sample collection is one of the major sources of errors and bias in analytical data. Sample collection and preservation procedures may vary depending on the samples and the parameters.

    Laboratory analysts are sometimes not involved in the sample collection. Sometimes, the laboratory is not even involved, the operators noted, adding that best practice requires that stakeholders (sample collection team, laboratory analysts, lab manager and customer, among others, review and agree on the sampling plan that would meet the objectives of the analytical campaign.

    They noted the safety implications of poor laboratory processes and procedures to include injury, downtime, fatality, loss of assets, regulatory sanctions, and loss of operating licence and environmental pollution.

    To prevent mishaps, they advised operators to verify supplies, such as calibration items, inert gases, syringes and develop safety risk register. They advised lab operators not to assume but use the appropriate personal protective equipment (PPE) and do a last-minute risk assessment, especially for non-routine activities.

    Operators, they said, should think of safer technologies, such as migrating from mercury thermometer to digital pipettes and safer break bottles, among others, and also ensure that personnel are familiar with spill kits.

    Laboratory operators should inspect facilities regularly and maintain safety barriers, such as showers, fume hoods and extinguishers and always thing of waste management and disposal options.

    According to the Head of Laboratory Services of DPR, Mr. Sikiru Abdulrahman, laboratories are supposed to be located in areas that are suitable for such operations but what we find sometimes is condemnable.

    He said DPR will, henceforth, not tolerate location of labs at the wrong places; as such labs would be closed down and the licences withdrawn.

  • Unending power sector battles for loans

    BY AKINOLA AJIBADE

    Nigeria’s liquidity crisis appears to be taking its toll on the power sector, as the Federal Government seek loans from lenders in developed economies to improve electricity supply and bring about positive change in the economy. But this is not without implications, writes AKINOLA AJIBADE

    After several attempts to fix the power sector and improve supply to the over 200 million Nigerians, hope seems to be rising for better days as one of the efforts to boost the sector is paying off —a fund raiser by the Federal Government, which returned to the global financial markets to get money develop the sector.

    The government had approached some notable financial institutions for long-term loans to actualise its dream of providing stable power supply. It was a huge success as it raised a lot of money from institutions, which included the World Bank Group, the African Development Bank (AfDB) and the International Monetary Fund (IMF).

    The World Bank okayed about $3 billion for Nigeria to expand its transmission and distribution networks, with fixed repayment period; and the European Union (EU) has mapped out strategies to support the development of solar energy in the country with 600 million euros.This is aside the $468 million, which the World Bank approved for Nigeria last year, for the expansion and rehabilitation of transmission lines and sub-stations.

    Earlier, the financial institutions and other Development Financial Institutions (DFIs) had offered grants and loans to improve the operation of the sector. Sadly, the efforts failed to produce positive changes, a development which may have informed the decision of the government to seek fresh loans from banks.

    Expectedly, the idea had ignited reactions among stakeholders in the value chain. While some believe that the idea came at the right time, and that if vigorously pursued, it would end the twin- issue of irregular supply of electricity and gradual decline in production, others hold different views, saying the government’s plan to source additional loans for the sector would amount to a waste of time and resources.

    To them, the government had misplaced its priority, by asking the World Bank to provide  it with $3 billion, to expand the distribution and transmission networks.

    The Managing Director, Zerena Consulting, Mr. Meka Olowola, said while it was instructive that the Federal Government is trying to resolve some of the issues besetting the sector, he, however, queried its intention  in asking for fresh funds since it failed (in his opinion) to properly invest similar loans in the past.

    He admitted that liquidity was one of the problems hindering the growth of the sector, but urged the government to tread softly. He said the government has invested a lot  on the sector without getting returns commensurate with the investments.

    Referring to the $16 billion allegedly spent on the sector by previous administrations, he said the sector had gulped a lot of money without yielding positive results. The sector, Olowola said, has neither improved its operation nor been accountable for the manner the huge cash was spent.

    He said: “It is difficult to keep track of records of the amount invested in the sector in the last 20 years, precisely from 1999 to 2019. The amount is huge, as successive administrations invested a lot of money on the sector,without getting results that are proportionate to their investments. Yet, the government is asking for more loans.”

    •Transmission line

    The problems facing the sector, Olowola said, are not interminable, as they could be solved through ideas, and not specifically through loans. “There is ample empirical evidence that the problem facing the sector is not so much about resources or skills. Though resources, especially money, is needed to resolve the problems in the sector, the issue is more than that,” he added.

    On the sector’s operation, he said the industry could generate enough megawatts (mw) for the country, once the shortage of gas and other equipment were resolved.

    He said the power generation companies (GenCos) often produced beyond what DisCos  could distribute. Based on this, the country does not need extra spending to move the sector, arguing that the sector only needed to re-adjust its operations.

    Also, the Technical Director, Consistent Energy Limited, Mohammed Ettu, said the sector require overhauling, not external loans, which the government was trying to source. He pointed out that the $3 billion, which the Federal Government requested from World Bank could not provide immediate solution to the problems, if it was not first overhauled.

    He said generation, distribution and transmission arms must be overhauled, if the industry must record growth. When this happens, each of the three key operators would be able to function optimally, Ettu said.

    Attaining industry capacity of 13,000 megawatts (mw) of electricity, or surpassing it would be done with minimal efforts, once the sector is overhauled.

    On recapitalisation, Ettu said the sector could not garner enough funds for growth, adding that neither the government nor the owners of the privatised energy firms had the required cash to shore up the capital base of the sector.

    Ettu said: “Recapitalisation is a good thing, if the government or the owners of the privatised firms have money to beef up the operation of the sector. Unfortunately, there is no money to recapitalise the sector. Even if there is money to do that, the question that suffice is, who will manage the recapitalisated companies. No sane investors would do that. The best thing, which  the government can do is to buy new plants and other facilities to grow the sector.”

     

    Implications for sector

     

    The sector is yet to get its bearing, nearly six years after the assets of the Power Holding Company of Nigeria( PHCN) were un-bundled and sold to private investors. The sector is facing liquidity challenge, as evident by the inability of many of the firms to fund their operations. This implies that the sector would spend some years to finance some of the loans it took for operation.

    According to Ettu, stakeholders, especially consumers, will be most affected, in the event that the sector is unable to meet its obligations to service the loans.