The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru has raised the alarm that the incessant rejection of power allocation by the electricity distribution companies is hindering the evacuation of 4,500MW of electricity from the national grid.
In his keynote address at the recent Annual Oloibiri Lecture Series organised in Abuja by the Nigerian Council of the Society of Petroleum Engineers (SPE), Baru stated that over 4,000 cars in Benin, Edo State, are currently running on gas.
According to him, the country has enough gas to generate about 4,800MW currently and also attain 6,000MW by the second quarter of 2017, based on NNPC’s gas supply plan.
He, however, added that the power sector is presently struggling to evacuate 4500MW power due to Discos’ incessant rejection of allocated load and transmission line constraints.
Baru noted that despite the difficult environment, which NNPC operates, the corporation is committed to ensuring adequate gas supply to meet the Nigerian industrial growth.
According to him, beyond growing gas for the power sector, there has been a strategic positioning of the sector to support massive gas based industrialisation.
The intent, he said, is to position Nigeria as the regional hub for gas-based industries such as fertilizer, methanol, petrochemicals and others.
Baru identified the planned 30 square kiloemtres Gas Revolution Industrial Park in Delta State as the first of these efforts, saying the project will be Africa’s largest purpose built gas Industrial park supporting gas based industries.
“On fertilizer, we have assembled a portfolio of projects enabled by a strategic gas pricing policy that attracts these industries to Nigeria. Today, there are 5 projects with combined capacity of 10MTPA in the works. The first of which is Indorama fertilizer which was commissioned in 2016 and others such as Dangote, Nagarjuna and Brass are in various stages of project development and construction,” Baru explained.
In a reference to NIPCO’s compress natural gas (CNG) project in Benin, Edo State, Baru added that as part of a holistic strategy to position gas as the fuel of choice, NNPC had successfully completed a pilot programme to introduce natural gas as fuel for transportation through Compressed Natural Gas (CNG).
“Today, over 4000 cars, mostly commercial taxis, run on natural gas in Benin, served by a network of 6 gas filling stations. We are currently extending the CNG initiative to other parts of the country. Apart from the obvious environmental benefit, use of gas in transportation is cheaper, taxi drivers save significantly on petrol cost by using gas, as CNG is sold at 46 per cent the price of petrol. Dangote cement factories are converting their trucks to run on CNG as it is not only cheaper but it is neater and cleaner and pilferage free,” he added.
He said good progress was being made in gas utilisation domestically, adding that in order to establish a commercially sustainable framework for gas supply an aggressive gas infrastructure blueprint is being pursued vigorously.
According to the NNPC boss, a well-articulated gas based industrialisation programme is also currently under way.
With respect to commercial frame work, Baru noted that the gas prices of the different sectors have been announced and is being applied.
“These include the following: Gas prices to Power is $2.50/mmbtu; gas price to Commercial sectors is $3.00/mmbtu; gas price to Strategic gas based industries such as fertilizer have a price floor of $0.9/mmbtu; gas transmission tariff is $0.8/mmbtu,” he explained.
“Gas Supply Agreements have now been institutionalised moving the supply landscape from best endeavors to one governed by bankable gas agreements which is a critical requirement for private sector investment in the sector.
Many GSPAs’ are now being negotiated,” Baru added.