Gas companies owed $500m
By Mike Eboh
ABUJA—Nigeria needs an investment of $6 billion to produce about two billion standard cubic feet (SCF) of gas per day to generate 10,000 megawatts of electricity, according to stakeholders in the gas sector.
Briefing at the Gas Aggregation Company of Nigeria’s, GACN, Gas Buyers’ Forum in Abuja, yesterday, Senior Commercial Adviser, Upstream Gas of Shell Petroleum Development Company, SPDC, Mr. Emmanuel Anyaeto, however, stated that investors were willing to bring in the needed investment but were hindered by a number of factors.
He said, “The amount of investments needed to get two billion SCF is about $6 billion —both plant, pipeline network and infrastructure. What people do not understand is that the way the gas business works, the problem is not with the investment. There are producers to do the investment. The challenges is if they produce, are they consumers that would pay? If the power sector can work in a way where the consumer pays, and from what it pays, every other person in the value change is paid, and then these things would work.
According to him, gas producers in the country were currently being owed about $500 million, mainly by power companies, majorly owned by the Federal Government.
He noted that the high debt owed the producers was another major disincentive to gas production and exploration.
Anyaeto noted that this was one of the reasons while power plants were starved of gas, irrespective of the fact that the country flared 800 million SCF of gas per day.
He added that the N701 billion power intervention fund, which was earmarked to pay for electricity generation, was inadequate, as the duration of two years stipulated by the World Bank, was too short to allow the loan make any meaningful impact in the growth of the power sector.
Also speaking, Chief Executive Officer of GACN, Mr. Morgan Okwoche, called on the Federal Government and the Central Bank of Nigeria, CBN, to include GACN in the disbursement of the N701 billion intervention fund, due to its strategic role in the sector.
Okwoche noted that the GACN had developed synergy and was in a position to satisfy any invoice, prevent disputes in payment s, and advise the Nigeria Bulk Electricity Trading Company, NBET on companies to be paid.
He said, “Another thing with Nigerian gas is that they are scattered in different isolated fields, difficult to harness. It would never make economic benefits where there are allocated in small volumes.” The gas gathering facilities would make it so expensive that it would not be worth it. Unless we have mobile arrangement, which is technology evolving, that you can go there. That is how naturally, we have the deposit.”