The Federal Government sells gas to the 10 power plants built under the National Integrated Power Plant (NIPP) by the Niger Delta Power Holding Company Nigeria (NDPHC) at the subsidised rate of $1.8 per 1000 standard cubic feet (scf) as against the fixed price of $2.5, it has been learnt.
The Deputy Director, Gas Monitoring and Regulation, Department of Petroleum Resources (DPR), Antigha Ekaluo, told The Nation that the government mandated gas suppliers to sell to NIPP plants at that rate.
Antigha, who spoke on the sideline of a stakeholders’conference, with the theme: “Implementation of the Nigerian Gas Transportation Network Code (NGTNC)”, in Lagos, said the plants were buying gas from the international oil companies (IOCs) and the Nigerian Gas Company (NGC).
The plants have the capacity to provide a combined 5,000 megawatts (MW) of electricity to the national grid. The plants include: Geregu, Calabar,Egbema, Ihovbor and Gbarain.
Others are Sapele, Omoku, Alaoji, Omotosho and Olorunsogo.
Antigha said the plants were built and put in the charge of the NDPHC.
According to him, the decision by gas suppliers to sell the product to the power firms at that rate was influenced by the forces of demand and supply.
He said: “The Federal Government pegged the price of natural gas at $2.5 per 1,000 cubic feet per day for power firms, but the price of gas to Methanol, fertiliser and other companies is $3 per 1,000 cubic feet. We have it on good note that many of the NIPPs get gas at $1.8 for production. This marks a cut in the gas price by $.7. The decision to sell gas at a price lower than $2.5 was not from the government.The gas suppliers in their own wisdom decided to sell it at $1.8. This is market forces at play.”
“For methanol, fertiliser and other gas-based industries, they are expected to buy gas at $3 per 1000 cubic feet. The price in actual sense may turn out to be different. This has happened before the introduction of the Nigerian Gas Transportation Network Code. We want the same thing to happen as the government begins the implementation of the code. What we are saying is that the forces of demand and supply should be ruling the gas market.
He said the government was providing incentives to gas users, especially those that have lean purses.
Also, the General Manager, Gas, Nigerian National Petroleum Corporation (NNPC), Sam Ndukwe, said the corporation was leading the transformation in the gas sector, especially in marketing and use of gas for domestic purposes.
He said the government was planning more infrastructure to help grow the sector. “Development of investments in gas vis-a-vis, making it readily available for users across the value chain, happens to be my key portfolio. We are trying to have additional infrastructure in the next five years. We are building new pipelines. The Trans Nigeria Gas Pipelines is one of such pipelines,” he said.
He said the issues on use and sale of gas are contained in the Petroleum Industry Bill (PIB), adding that there would be changes to be effected in the sector when the bill is passed into law by the National Assembly.
Ndukwe said: “PIB anticipates growth in the gas sector. With the bill, stakeholders are expecting great transformation in the oil and gas sector. The issue of gas infrastructure and the impact on various aspects of the economy are in the bill.”
The spokesman of NDPHC, Yakubu Lawal, said gas is the major problem in the industry, adding that the company had completed the building of the power plants.
He said it was not true that the company was delaying the privatisation of the plants by not completing the project. He stressed that the firm had done its own part of the job.
“Everybody knows that gas is the problem in the industry. Gas is a feedstock which the power plants need to produce optimally. The goal of our firm is to build the plant, and not to provide the gas,” he added.
