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Gas shortage worsens power supply

By Oscarline Onwuemenyi & Victor Ahiuma-Young
ABUJA— THE current power outages experienced across the country may get worse with the steady decline in power generation due to the inadequate supply of gas to fire the turbine power stations.

In the past two weeks, power generation has dropped from 2,700 Mw to about 2,400 Mw, and may get worse if the Shell Petroleum Development Company Limited, SPDC, carries through its threat to shut down the Oben, Sapele and Utorogu power stations, which it currently manages.

The multinational oil company had complained about the enormous amount of condensate that needed to be evacuated to enable it carry out supply of gas to the power plants. Last week, Shell, a major supplier of gas to the nation’s thermal generating plants had written to the Minister of Petroleum Resources and his counterpart in the Ministry of Power to alert them on gas supply situation if wet condensate estimated at 400,000 barrels was not quickly evacuated.

The evacuation of the wet condensate will create room for sustainable production and supply of gas to the domestic market, including the power stations.

In the statement, Shell stressed that if evacuation of the condensate by NNPC and its agency was not done before next week, the company might be forced to shut down the gas plants in Utorogu, Ughelli, Oben and Sapele. The implication of lack of gas supply to the nation’s thermal plants, especially in Egbin, Omotosho, Geregu, Olorunsogo, Sapele and Delta is that Nigerians will be starved of electricity.

Under the interim arrangement, Warri and Kaduna refineries are expected to take some of the condensate gas for their operations but information revealed that the management of the refineries declined to take the condensate. Shell suggested that NNPC needed to evacuate between 50,000 to 100,000 barrels of condensate daily to create room for further production of dry condensate that will go to the power plants.

Gas supply to the nation’s power stations has been on the decline as the six major sources are either not supplying or supply at less than 30 per cent of the expected volume to the power plants. For example, Chevron Escravos 1 is expected to deliver about 184million standard cubic feet of gas per day, mscf/d, but nothing is coming from this source.

Also, Chevron Escravos 2 ought to deliver 300mscf/d as well as Shell’s Sapele gas plant but nothing was delivered.
Ughelli Shell gas plant should have delivered 90mscf/d but only 30mscf/d was delivered due to rehabilitation work at the Sapele power plant which has limited its intake of gas. Shell’s Oben Gas Plant is also expected to make 90mscf/d while Utorogu Shell gas plant billed to supply 360mscf/d could only deliver 300mscf/d.

Caused by incessant pipeline vandalization

Oil industry sources explained that security challenges in the delta resulting in incessant pipeline vandalization has been responsible for the diversion of condensate to Warri where it could be used directly by Warri and Kaduna refineries which were due to commence operation after rehabilitation recently.

Last week, the Federal Government directed the Power Holding Company of Nigeria, PHCN, to conclude discussions on the Gas Supply and Purchase Agreement, GSPA, and Gas Transportation Agreement, GTA, with the Nigerian National Petroleum Corporation, NNPC, in a renewed effort to quickly conclude the negotiation and sign the agreement to guarantee supply of gas to the thermal power stations.

The Minister of Power, Dr. Lanre Babalola, who summoned the top management of PHCN to a meeting in Abuja to address the issue, said PHCN as an operator should be concerned about the declining generation as a result of gas challenges and come up with solutions. He said the country currently has over 5,000Mw generation capacity but lamented that the lack of gas to drive these machines has continued to draw the sector down.

Babalola said: “You have to conclude the on-going discussion with NNPC on gas issue and sign the agreement immediately. You should also finalize the framework for back-up fuel agreement based on LPFO and LPG for other power stations apart from Egbin for us to resolve these gas challenges.”

The Minister also directed PHCN to come up with a plan that could be implemented immediately on the alternative source of fuel such as Low Pour Fuel Oil, LPFO, and Liquefied Petroleum Gas, LPG, to drive the power stations that are currently idle.

Labour tackles Minister over outage

Meantime, organized Labour in the nation’s power sector, under the umbrella of the National Union of Electricity Employees, NUEE, has faulted the perceived buck passing by the Minister of Power, Dr. Lanre Babalola over the poor electricity supply in the country and advised him to stop giving untenable excuses for his failures.

The union said in a statement that it was surprised that the Minister was not remorseful for his inability to deliver the much touted 6,000 Mw as at 31 December 2009, arguing that it was becoming obvious that the Minister lacked the political will to address the power supply crisis in the country.

The statement entitled “Power Minister strives to make PHCN scape goat”, signed by the General Secretary of NUEE, Comrade Joe Ajaero, read in part: “We are stunned and amazed at the attitude of the Minister of Power, Dr. Lanre Babalola, by resorting to media publications on issues he ordinarily would have given directives in-house.

It is quite sordid and unheard of for the Minister to urge PHCN to check gas supply crisis when the onus lies on him to effectively dialogue and resolve this issue at the inter ministerial level between him and Petroleum Minister; and thereafter give directives on implementation of agreements.

The members of staff of PHCN and the National Union of Electricity Employees feel greatly embarrassed at the buck passing attitude of the Minister who should be remorseful for his inability to deliver the much touted 6,000 megawatts as at 31December, 2009.”


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