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How Nigeria, others lost N109.21b to ALSCON’s gas shut in, by expert


Nigeria and companies that were affiliated to the Aluminum Smelter Company of Nigeria (ALSCON) at Ikot Abasi, Akwa Ibom State may have lost over N109.2b to the closure and subsequent gas shut in that followed.

The closure of ALSCON is said to have cost Nigeria N1.2tr losses through Federal Government’s failure to ensure that all issues relating to its resumption of operations were resolved.This was contained in a statement issued by the Coordinator, Institute of Chartered Economists of Nigeria (ICEN) in the South-South, Friday Udoh.

“Investment in the 1100 kilometers stretch from Alakiri-Afam-Ikot Abasi Natural Gas supply node with throughputs of about 450,000 Scf/d (450mmscf/d) at 11 per cent operation covered a six-year period by its former owners, DHL/UC Russal between 2007 and 2013.

“The short-in natural gas cost Eroton Exploration and Production Limited, operator of OML 18 and the Nigerian Gas Company (NGC), as well as the nation’s economy a revenue of N50.3b,” the statement reads.He said the closure of the plant cost the two organisations another N58.81b translating to a loss of N109.21b revenue to the parties and the economy.

“Valuing the effects and aggregating same yielded negative net social benefits in justifying government’s disposition given the over N1.3tr investment that consumed the gas as chaotic and should be questioned.

“A policy with positive net social benefits is economically efficient relative to the status quo,” the statement added.On siting ALSCON at Ikot Abasi, bordering Imo River, Udoh said it was built with a capacity to process 375,000 tons per year (t/y) of Alumina raw material and 80,000 t/y of Coke with 20,150 t/y pitch to produce 193,000 t/y Aluminum from the initial capacity of 180 t/y as ingot, billet and slabs.He added that 85 per cent of the products were meant for export and the balance for domestic market consumption, but lamented that the project has so much to be desired.

He said that the plant commenced operations in October 1997 with purchase of ‘green’ anodes, as the anode facility was uncompleted without a robust gas supply contract.Udoh added that Alumina were delivered through barges en-route Imo River to the dock facility at smelter site following inability of the water depth accommodating the 20,000-25,000 tons bulk carriers normally used in the industry.

“In the first quarter of 1998 when operations reached approximately 25 per cent of the plant installed capacity, it was consuming natural gas in excess of 20,000 Scf/d (20 mmscf/d) to which the NGC sought restriction of the output and necessary operation cut back to 20,000 Scf/d (20 mmscf/d). “Shortly, afterwards in May 1999 just as the plant attained a 45,000 t/d production capacity, a decision was reached to shut it down due to unavailability of working capital,” he added.


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