June 10, 2014

Nigeria to achieve 3bscf/d of gas in 2020 — PTFP


Gas shortage, which has been at the centre of poor power supply in the country, may be a thing of the past if the federal government makes good its promise to achieve three billion standard cubic feet of gas daily in 2020.

This is just as corruption and poor management have been identified as the bane of infrastructural development in the country.

Giving the assurance of the expected gas supply improvement, at the Lagos Chamber of Commerce and Industry, LCCI, dialogue on power last week, Mr. Beks Dagogo-Jack, Chairman, Presidential Task Force on Power, stated that government is determined to provide adequate electricity supply to the citizenry.

“Government is mobilising funding where necessary on the gas side as well as on the transmission side. A lot is happening; the idea is to close the misalignment gap and get a certain level of volume credibility in the grid. Down the stretch, say by 2020, the NNPC strategic gas plan will give us 3 billion standard cubic feet, SCF, per day,” he said.

He also explained that the independent power project developers are projecting gas-fired capacities close to 18,000 megawatts,MW, but based on the current NNPC strategic gas plan, there is only enough gas for 10,500MW.

According to him, “unless the gaps can be closed and capacity increased at a faster rate in the gas and transmission value-chains, these will become the limiting factor in the quantity of power that can be supplied to end consumers.”

Dagogo-Jack, who identified insufficient energy and technical performance as one of the challenges of the power sector reform, also said that current power assumptions in the tariff may not be achieved given the current project timelines in critical gas and transmission projects.

“If this occurs, it will result in a market unable to adequately generate the funds to cover its fixed and variable costs. This inability will present itself by shortfalls in energy sold and subsequently in market payments,” he said.

He therefore identified the remedies to include; tariff recalculation, acceleration of ongoing projects and execution of new projects.

The PTFP Chairman further said that the recent problems associated with vandalism and attacks on crude and gas pipelines have shown a significant risk point of the reform in this regard.

“Given this fact, it is imperative that solution diversity is sought to increase the energy mix, promote energy security and maintain system robustness to fuel supply volume and price shocks.

Options that need to be considered from a policy and regulatory view point are: Hydropower solutions (especially small to medium hydro in Northern Nigeria); solar-power solutions (especially in North-Eastern Nigeria); wind-power solutions (especially in North-Western Nigeria); Coal-fired power solutions (especially in the coal regions of Eastern and Central Nigeria); and biomass power solutions,” he said.

Also speaking, Mr.Remi Bello, President of LCCI, said, “The management of our utilities should be insulated from the bureaucracy and political interference. The problem with most of the utilities is not so much the lack of resources but the appalling quality of management and scandalous corruption.