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Gas supply to electricity plants drops to 541mmscfd

By Roseline Okere
29 June 2016   |   1:55 am
Gas supply to electricity plants in Nigeria has dropped from the 686mmscfd it recorded in April to 541mmscfd in May, according to the Nigerian National Petroleum Corporation (NNPC).
A gas processing plant

A gas processing plant

Gas supply to electricity plants in Nigeria has dropped from the 686mmscfd it recorded in April to 541mmscfd in May, according to the Nigerian National Petroleum Corporation (NNPC).

The corporation said in its analysis on domestic gas supply to power sector that the country’s average power generation also declined from 2,969mw to 2,466mw in the month of May.

Giving a breakdown on gas supply to power plants, it disclosed that there has been consistent drop in the quantity of gas to power plants since January this year from 734mmscfd to 541mmscfd in April.

This, it noted, has also affected power generation, which reduced from the 3,065mw it recorded in January to 2,466mw.A new militant group called Niger Delta Avengers has in the past weeks crippled oil and gas supplies from major facilities belonging the Shell, Chevron, Agip and the NNPC, signalling a fresh hurdle for the petroleum and power sectors.

Speaking on the solutions to gas supply crisis in the country, the President Nigerian Gas Association (NGA) and Chief Executive of Oando Gas & Power, Bolaji Osunsanya, said that the present gas supply challenge was man-made, and requires a multifaceted approach to address the key drivers of the disruption.

This, he said, would include a combination of dialogue, an alignment of interests, applicable sanctions, and fair treatment as needed.He stated: “For one, the creation of an appropriately constituted and independently audited Host Community Fund would be a way of further positioning oil & gas communities as key stakeholders.

In the interim, the government needs to increase the engagement and involvement of community leaders and influencers to create the necessary awareness regarding the crippling effects of the current disruptions in the Niger Delta on the environment and the local economy.The government must also consider other initiatives to expand the supply of gas into the market. Such an initiative would be a gas specific bid round tailored to ensure that the gas is deliberately developed for supply into the market.

On the infrastructure side, the government may need to revisit the gas infrastructure blueprint to actualize processing facilities, and fast track the completion of the backbone infrastructure that ensures supply flexibility and robustness.

In addition, we must begin to consider an energy mix comprising renewable, hydro, and certainly nuclear.“Crucially, the current crude oil and gas supply shortage has highlighted the pressing need for the implementation of a long term security monitoring framework which has the buy-in of all key stakeholders.This will, of necessity, include increased round the clock military deployments for effective monitoring of oil & gas installations and the adoption of modern technology to aid the surveillance of pipeline infrastructure by security agencies”.

He also called for active private sector participation to ensure the mobilization of the much needed funding for infrastructure development. “In addition, private enterprise promotes operational efficiencies which is required to ensure value add in the sector. Bridging the infrastructure gaps facing the industry would require extensive capital, creatively structured to meet the long-term requirements of all stakeholders.

“The largest gas consumer group in the domestic market is the power generation sector that supplies power to the market. As earlier described, this group, mostly private sector led, has been severely affected by the gas shortages in the domestic market. The embedded generation regulations can be exploited by private sector generators, working with the Discos to creatively securitize their investment, to provide much needed power to the industrial and commercial sectors. By so doing, the market can assure that the investment needed to provide gas infrastructure such as processing facilities, transmission (both onshore and offshore) and distribution pipelines is secure”.