Nigeria’s Electricity Concerns to Ease as Forcados Pipeline Resumes

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Concerns over Nigeria’s epileptic power supply situation are expected to ease on the back of resumption of oil and gas production activities at the Forcados export pipeline. This is coming on the heels of Shell Petroleum lifting the Forcados force majeure.

Power supply in Africa’s largest economy dropped significantly from 3,959 megawatts to 2,662mw in January, prompting a furious backlash from across the nation against the Federal Government and Babatunde Raji Fashola, minister of works, power and housing.

But while explaining the reasons for the poor power supply, Fashola revealed that power supply across the country had worsened due in apart, to the vandalism of the Escravos-Lagos pipeline and the shutdown of the Forcados export terminal due to militant activities in the Niger Delta. The other reason, according to Fashola, was the huge debt owed gas suppliers due to lack of liquidity.

He said: “If you can’t produce oil, you can’t take the gas. The gas is the fuel that the power plants need. You have seen what we have been doing in increasing the capacity in firing transmission. But we don’t have fuel to fire the plants; that is the reason.”

It would be recalled that repeated attacks on the nation’s oil and gas installations located in the oil rich Niger Delta region for most of last year, led to a spill at the subsea crude oil export pipeline, which forced Shell Petroleum Development Company, SPDC, to declare a force majeure on Forcados operations.

Efforts geared towards fixing the pipeline were frustrated by renewed attacks on the nation’s critical assets by the Niger Delta Greenland Justice Mandate, NDGJM.

Prior to the attacks, the Forcados pipeline was responsible for producing between 200,000 and 240,000 bpd of Nigeria’s crude oil exports, while at the same time supplying gas for the nation’s power plants.

With the shutdown, Nigeria’s power supply took a nosedive. As of January 2017, power generation across the country dropped to an all time low of 2662MW, according to the Transmission Company of Nigeria, TCN. The transmission company attributed the drop to insufficient gas supplies occasioned by militant attacks on the nation’s critical assets located in the Niger Delta region.

Added to this, five of Nigeria’s power plants, including Egbin, Nigeria’s biggest, were also not getting gas because the key Escravos-Lagos supply pipeline had been vandalism.

Nigeria has an installed capacity of 12,000 megawatts of installed capacity but only generates about one-third of it due to insufficient gas supplies. Transmission also remains an issue due to incomplete power transmission projects across the country.

According to the latest report on Nigeria’s power supply index by Financial Derivatives Company Limited, as of June 4, average power output across the country dropped to 3,345MW per hour, reflecting a drop of 289MW per hour.

But as the Forcados Pipeline comes back on stream, there optimism that the resumption of gas supply to the power plants will ramp of power supply across the nation.

Source: Business A.M

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