By Prince Okafor
Domestic gas supply to gas fired generating plants (GenCos) across the country rose significantly by 0.51 million standard cubic feet per day (mmscfd) to 2,505mmscfd in the first quarter (Q1) of 2021.
This is 20.2 per cent increase when compared to 2,000mmscfd recorded in the corresponding period of 2020, data contained in the Nigerian National Petroleum Corporation, NNPC, Financial and Operations Report for the month of April, 2021 has shown,
According to the report, a total of 795mmscfd was delivered to gas fired power plants to generate an average power of about 3,416 Mega Watts of electricity in April, 2021.
Energy Vanguard gathered that this is a decline of 6.0 percent when compared 844 mmscfd supplied in March, 2021 to generate 3,530MW.
The generation sub-sector includes 23 grid-connected generating plants in operation with a total installed capacity of 10,396 MW (available capacity of 6,056 MW) with thermal based generation having an installed capacity of 8,457.6MW (available capacity of 4,996 MW) and hydropower having 1,938.4 MW of total installed capacity with an available capacity of 1,060 MW.
However, the report also indicated that a total of 2,355mmscfd of gas was sent to the generating plants in the fourth quarter of 2020, an increase of six per cent when compared to Q1’2021.
Gas production and supply
A breakdown of gas distribution figures showed that a total of 209.27 Billion Cubic Feet (BCF) of natural gas was produced in the month April 2021 translating to an average daily production of 6,975.72mmscfd.
For the period April 2020 to April 2021, a total of 2,902.52 BCF of gas was produced representing an average daily production of 7,369.76mmscfd during the period.
Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and NPDC contributed about 62.07 percent, 19.95 percent and 17.98 percent respectively to the total national gas production.
According to the NNPC report, out of the 206.40BCF of gas supplied in April 2021, a total of 126.83BCF of gas was commercialized; consisting of 42.92BCF and 83.91BCF for the domestic and export market respectively.
This translates to a total supply of 1,430.90mmscfd of gas to the domestic market and 2,976.94mmscfd of gas supplied to the export market for the month.
This implies that 61.45 percent of the average daily gas produced was commercialized while the balance of 38.55 percent was re-injected, used as upstream fuel gas or flared. Gas flare rate was 9.74 percent for the month under review.
Total gas supply for the period April 2020 to April 2021 stood at 3,081.77 BCF out of which 548.34 BCF and 1,398.78 BCF were commercialized for the domestic and export market respectively. Gas re–injected, Fuel gas and Gas flared stood at 1,134.64 BCF.
“Out of the 1,430.90 mmscfd of gas supplied to the domestic market in April 2021, about 794.79 mmscfd of gas representing 54.54 percent was supplied to Gas-Fired power plants while the balance of 636.11mmscfd or 44.46 percent was supplied to other industries”.
Similarly, for the period of April 2020 to April 2021 an average of 1,313.32 mmscfd of gas was supplied to the domestic market comprising an average of 778.76 mmscfd or (59.30%) as gas supply to the power plants and 534.55 mmscfd or (40.70%) as gas supply to industries.
FG mulls gas price reduction for GenCos
The Federal Government has stated that plans are underway to reduce the price of gas for power generation companies in the country.
This, according to the Minister for Industry, Trade and Investments, Otunba Adeniyi Adebayo, is geared towards boosting the manufacturing sector competitiveness which has been hampered by power electricity supply.
Speaking at a roundtable discussion on the industrialisation of Africa organised by the Manufacturers’ Association of Nigeria, MAN, weekend, Otunba Adebayo, noted that Africa contributes less than two percent to international trade, pushing it to the bottom of the global value chain.
He said this led to lower export trade volumes, lost job opportunities and reduced foreign exchange for players in the continent’s real sector.
According to him, all stakeholders need to work together towards developing measures to improve the cost competitiveness of the manufacturing sector in order for Nigerian industries to lead the transformation of the country and Africa’s economy.
Adebayo said: “For example, we are collaborating with the Ministry of Petroleum Resources to lower the cost of gas which is critical to the production of the energy sector. This is one factor that can improve the cost competitiveness of the sector.
“Another way that Nigerian industries can position themselves for the African economic transformation is by aligning themselves with the country’s industrialisation programme.”
Despite the rise in domestic gas supply, Nigerians have continued to lament over the epileptic power supply across the country.
Former President, Manufacturers Association of Nigeria (MAN), Mr. Frank Jacobs, stated: “It is possible to gauge the loss suffered by manufacturers arising from paucity of electricity supply and high cost of alternative energy source. Capacity utilization in the sector has barely been above 50 percent.
“This implies that the production has been sub-optimal; production value in the sector was estimated at N8.38 trillion in 2016. Another way of measuring the loss to manufacturers as a result of the challenges of electricity supply is by looking at the huge cost of alternative energy which was estimated at N129.95 billion as at 2016.
“Even though the sector, especially the distribution aspect has been privatised, it is important that government should find ways and means of supporting the DisCos until a stable, quality and reasonably priced electricity is available to the manufacturing sector.
“There is need for government to continue to offer integrated support to all stakeholders on the NESI value-chain i.e. manufacturers, GenCos, TCN, and DisCos in terms of finance and expertise.”
A trader in Olodi-Apapa, Kazeem Onoja, said power supply was good when he moved to the area about eight years ago.
According to him, “Then, public power supply from PHCN was quite okay, we were having between 14 and 20 hours of power supply on most days. We knew their schedule- the days we are meant to have supply and the days we would not have except a major fault occurred.
“Power supply has steadily deteriorated as the area developed and more people come into the neighbourhood”.
On her part, Executive Secretary, the Association of Power Generation Companies, APGC, Joy Ogayi, said: “To bridge the gap between demand and supply of power, there is need for all parts of the power chain to be fully effective to bring about the installed capacity of 13,200MW to hungry consumers.
“However, this is not the case in the power sector in Nigeria.”