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Power: FG spends N1.8 Bn Monthly on LPFO

By Yemie Adeoye
THE Federal government has announced that expenses on Low Pour Fuel Oil (LPFO) to run the Egbin thermal station due to a shortage in gas supply has gotten as high as N1.8 billion naira per month, even as it has commenced plans to develop coal power plants near large coal deposits in the country.

President Yar Adua
President Yar Adua

This was gathered during an official visit to the Egbin thermal station by the Minister of Power, Dr.Lanre Babalola over the weekend.According to the Minister the issue of gas supply to these plants have been on the front burner and is of paramount importance as nothing can be achieved without it.  He also made it clear that the federal government’s desire on the 6000Megawatts (Mw)is in an effort to ensure that the necessary infrastructure is on ground by that time to enable the generation, transmission and distribution of the 6000 Mw by December.

He also noted that while the LPFO is indeed very expensive to use in terms of power generation, it was more like the devil’s alternative “that is why again if you heard the CEO, he did say that they are only using LPFO to run 50Mw.

“It is essentially what I would call a sort of back up during emergency supply. It is contempt of law if you have a fuel in your facility, and there is inadequate supply of electricity in the country and you don’t give electricity. It is very difficult to explain to Nigerians that we have plants but we cannot run them. I think this is bad enough for the plants. So it is a fuel we use when we have no choice. It’s quiet expensive.”

On the issue of gas supply to fire the plants the minister stated that consultations are still ongoing with officials of the oil and gas industry in order to be able to get the adequate amount of gas needed to power the gas stations in the country.

“We’ve been in touch with our colleagues in the oil and gas industry. And we have been talking for a very long time to make sure for the good of the entire sector and also to integrate our plans to make sure that the gas required by all the power stations are available. As well as to scrutinize our work plan.

It was on this basis, when the programme was first put together late last year and early this year, when it was clear that we want to revive the game that we were assured by the gas producers that there would be available gas for the power stations before the end of the year.

The optimism that we express is based on that information that came from the oil and gas sector that gas would be available. Yes there are some challenges. This has led to reduction in gas supply but with the current efforts of government to address most of the issues, I’m sure that if the dividends paid off you would see the power stations working as they are expected to do and supply electricity to Nigerians.” he said.

In his own reaction the Executive Director Operations for the Power Holding Company of Nigeria (PHCN) Mr.John Ayodele stated that while the LPFO is not an economical solution to the problem at Egbin it came as an emergency alternative that could not be avoided.

“LPFO is not the economical solution to this problem but it is an emergency situation that we have to contend with. That LPFO is blended by NNPC, both from Warri and Port Harcourt. However, It is cheaper to get it from Warri than to get from PortHarcour, while it is more difficult to transport from Warri than PortHarcourt.

But on the average, a unit in Egbin with its current production of between 200 and 210Mw would require between 25,000 and 28,000 metric tonnes per month.

This translates to between N1.5billion and N1.8 billion per month to run. So when some people think that they are paying so much money, you then need to consider that just to generate about 200Mw on LPFO you need between N1.5 billion and N1.8 billion depending on whether it is from Warri or Port Harcourt.

You would understand this now. And 200Mw is just what Ikeja industrial area needs. so to fuel Ikeja industrial area alone, it requires about N1.5 billion per month. This is for the fuel alone and does not include maintenance of the machine, salaries, welfare matter and otherwise. That is the true picture of what we face on a daily basis.” he said.


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