1 January 2013

Nigeria: Chevron Restores Domestic Gas Supply


About a fortnight ago the Federal Government blamed the drop in electricity generation on the shortage of gas supply to the power plants, especially the from the oil majors, notably the Escravos Gas Plant, operated by Chevron Nigeria Limited, CNL, which supplies most of the gas used in feeding many of the National Independent Power Plants, NIPPs.

However, CNL in a short and brisk response to our enquiries explained that the Escravos Gas Plant was only shut down for about 19 days for routine maintenance and had since continued to meet its domestic gas obligations. Excerpts:

We understand that gas supply from Escravos has been completely cut off to the power plants?

We can confirm normal levels of sales gas delivery to the domestic market. The Escravos Gas Plant (EGP) had a short period of reduced sales gas delivery into the domestic market which lasted till early December, but the plant did not shut down during that period.

We also understand the pipeline is undergoing some maintenance?

The pipeline is operational. The Company undertook scheduled annual maintenance activities on its gas facilities in November, but has since been back up and delivering gas to the domestic market.

What is the nature of the maintenance and how soon is it expected to be completed?

The pipeline facility is in normal operation. It underwent a pre-planned annual maintenance, which has since been completed. The maintenance schedule was known to all parties well ahead of the activities.

When will full supply of gas be restored to the power plants and at what quantity?

Normal level of sales gas delivery to the domestic market has been effective since December 12, 2012.

We also understand that part of the issue with supply has to do with outstanding debts for previous supplies?

The reduced supplies during the period November 24- December 12 was due to the scheduled maintenance activities earlier explained.

How much is being owed by the power plants and how much has been paid to date?

We cannot discuss the financial terms in place with our customers.

Chevron has a robust gas development strategy that supports Nigerian Government's Gas master plan which aims at growing the economy with gas by stimulating the multiplier effect of gas in the domestic economy, positioning Nigeria competitively in high value export markets and guaranteeing the long term energy security of Nigeria.

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