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NNPC’s gas to power support for grid stability

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Three years ago, the famous ‘where is the power’ by President Muhammadu Buhari asking President Olusegun Obasanjo that held sway between 1999 and 2007, to account for the US$16 billion allegedly squandered in power projects. The electric power debacle was the issue of political power discourse among leaders and interest groups in Nigeria. Electric power development is a problem and we all admit that it is hindering industrial development in Nigeria.

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Many will say perceived corruption is holding us down and dragging us backwards. We are going into different bilateral cooperation to increase our electric power without ascertaining the quanta of technical and financial requirements. We have not been able to get our projections right that as our population is increasing there is a concomitant demand for electric power. As the population that nobody in the country including the national planning ministry, the national population commission, and the national bureau of statistics can give a figure, electric power data is all about a calibrated guesstimate. We derive our data from what the Bretton Wood institutions (the World Bank and the International Monetary Fund) in the United States generate for us.

From electric power generation, transmission and distribution the nation is yet to get it right. Nigeria privatised the generation and distribution sectors but electricity supply seemed to get worse than the Federal Government may consider determining the privatisation embarked upon by the last administration. With data false start, we tinker diversification, as life must go on.  The NNPC, as part of corporate Nigeria, tries to fulfil its mandate of becoming an integrated energy company, by diversifying into power projects. In 2017, NNPC subsidiary, the Gas and Power Investment Company, received the assurances of the Nigerian Electricity Regulatory Commission (NERC) to generate 4,000 Megawatts, to increase the parent company’s investment profile beyond oil and gas to power generation. Are they achieving it? The Group Managing Director of the NNPC, Mallam Mele Kyari, last week on the sidelines of the Nigeria International Petroleum Summit in Abuja, announced that the national oil company has secured a grant of US$1.16million from the United States Trade and Development Agency (USTDA) to facilitate the establishment of a 1,350Megawatts (MW) Independent Power Plant in Gwagwalada, Abuja. The grant also includes the provision of technical, economic and financial analyses necessary for the development of the combined cycle, natural gas-fired power plant.

The NNPC under Kyari has delivered the Oben-Obrikun and Obiafu (OB3) gas pipelines, expanded the Escravos-Lagos Pipeline System 2 (ELPS 2), and with her partners are about to construct the Ajaokuta-Kaduna-Kano (AKK) pipeline, which would deliver gas from the OB3 line to Kano. The AKK plan is to build three independent power plants in the Abuja, Kaduna and Kano corridor, to increase power into the national grid to ensure stable power supply. Kyari assured that the NNPC under his watch would provide the necessary infrastructure to reduce the power deficit. Over 81.8 per cent of power in the national grid from gas is transmitting under 7000MW and distributing from3,000MW to 4,000MW. That is why we should appreciate the NNPC’s contribution. As Nigeria has gas in abundance, we have a comparative advantage that we should invest in it as a mix of energy.

The various energy sources are coal, oil, nuclear, gas and the renewables.  Many countries in the developed world are hardly buying into the use of gas for electricity.   The United States use of natural gas for electricity is 31.9 per cent. Others are China 2.5 per cent, France 3.5 per cent, UK 29.7 per cent, Russia 49.7 per cent, Germany 9.8 per cent, and Spain 18.9 per cent. The world’s use of natural gas for electricity is 22.8 per cent. Moreover, this is mostly in less developed countries. The more developed countries prefer the use of coal that stands at 65.2 per cent as a global electricity source. It is instructive that the COP 21 otherwise known as the Paris Agreement (between 2015 the date of the Paris Agreement and 2030) is forcing the industrial world to consider investments outside coal. Oil price reports that French supermajor, Total’s key pillars of integrating climate in its strategy is improving energy efficiency, growing in natural gas, developing a low-carbon electricity business, sustainable biofuels, and investing in carbon capture, utilization and storage (CCUS) technology.

The GMD believes in reducing gas flaring. By stopping gas flaring, we inject more gas into the system to deliver electric power for industrial growth in Nigeria. He agreed that forecasts indicate that by 2040 renewables would only account for about 20 per cent of global energy needs which means that fossil fuel would continue to deliver at least 70 per cent of global energy. Natural gas fits many needs for power generation, considering it is more economical and produces only half of the carbon emissions of coal. Demand for natural gas, which is increasingly fueling electricity generation in the United States and now worldwide, grew by 4.6 per cent in 2018, its fastest pace since 2010, according to the International Energy Agency. Global demand projection for natural gas is that it would exceed 4.3 trillion cubic meters in 2024. Therefore, it is for Nigeria to muster the will to use the nation’s vast natural gas resource to add value and create wealth and prosperity for Nigeria.

Vanguard

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