17 February 2014

Nigeria: Electricity - Power Plants in One Billion SCF Gas Shortfall

THERE are indications that about 1 billion standard cubic feet (SCF) of gas shortfall may stall the early realisation of constant power in Nigeria, as stakeholders in the energy industry have said that it will take at least five years before uninterrupted power supply could be achieved.

Speaking on the issue of gas supply in the power industry, Austin Avuru, Chief Executive Officer, Seplat Petroleum Development Company Limited, said that gas demand in the last four years has gone up from under 500 million SCF, to over 1 billion SCF, per day and by the end of 2016, it will be approaching 2.5 billion SCF, to 3 billion SCF, per day.

According to him, "As we speak today, there is a shortfall of 400 million scf supply of gas a day to the power sector. The demand is 400 million SCF, higher than what we can supply. By the end of this year, when the last batch of the NIPPs would have been sold, the short fall will be 1 billion SCF.

"There are probably one or two companies that are investing in gas development. If you start investing today in gas development, you are targeting that production for 2016 to 2017. By 2017, we are talking about over 1 billion SCF shortfall in a very critical sector as the power sector. It is already a national emergency. Everybody in Abuja knows there is no immediate solution," he said.

On his own part, the Chief Executive Officer of Sahara Group, Tonye Cole, said it will take at least five years from now before Nigerians begin to experience uninterrupted power. Cole explained that there were certain areas needed to be improved upon before stable power would become reality.

According to him, one of such would be improvement in the way information is shared among key players in the sector for the next couple of years. He also said that pipeline vandalism in Nigeria had contributed hugely to the poor power supply.

"Anybody that vandalises a pipeline may vandalise the pipeline to go and sell crude somewhere thinking that he is making money, but each time he vandalises a pipeline, whether it is a gas pipeline or an oil pipeline, it affects everyone.

"But before we can get to a point where we don't have to think about power because it is just there, it requires a lot of investment, a lot of capital has to go into that," he stated.

Cole further explained that the power sector had taken a new shape with the taking over of the Power Holding Company of Nigeria by private owners, saying that the private companies still have to work with the government and the regulators to achieve realistic results.

"It is a new area and it is expected that laws and relationship between the regulators, investors and customers will be shaped along the way.

According to him, people need to understand the difference between generation and transmission and then the difference between transmission and distribution.

"Most people don't know what these things are and as far as the customer is concerned, he wants just one thing, power. That is all. We will begin to see improvement within six months, but improvement in communication is the first thing that we need," he explained.

Due to inadequate supply of gas operations of the new power stations built under the National Integrated Power Project (NIPP), which are currently undergoing privatisation, have been stalled, Vanguard learnt.

It was gathered that some units of most of the 10 medium-sized gas-fired power stations, which are expected to add 4,774MW of electricity to the national grid, have been completed and ready for test-firing. However, insufficient gas supply from NNPC is threatening the operations of the power plants.

Though the Nigerian National Petroleum Corporation (NNPC) confirmed the repair of its gas-to-power supply pipeline that would lead to the re-injection of an equivalent of 1,505 MW of electricity into the national grid, the power plants would still have to contend with gas shortfall.

For example, the 634.5MW-capacity Calabar Power Plant, operated by Calabar Generation Company Limited, which has since been completed technically, has not been able to secure gas to test-run the plant for its inauguration as there are no indications that Addax Petroleum, which is billed to supply 100 million SCF, of gas per day to the facility, would deliver the gas this year.

Inadequate gas supply has also stalled the operation of the six-unit, 1,131 MW capacity Alaoji Power Plant in Abia State, which is the biggest plant under the NIPP. Vanguard learnt that four out of the six units of the plant, built by Rockson Engineering Limited, an indigenous contractor, have been technically completed but only two units are producing at sub-optimal capacity due to gas shortage.

Sources told Vanguard that without adequate gas to fire the four gas-powered units, the remaining two units, which will run on steam, cannot generate power. It was also learnt that as a combined cycle power plant, which runs on both steam and gas, the two steam turbines can only generate electricity when the four gas turbines generate enough steam to fire the two steam turbines.

According to a source "It is the four gas turbines that will fire the water boilers to produce steam that is used to operate the steam turbines to avoid waste of energy. Without gas to fire the four completed gas turbines, the two steam turbines cannot generate power."

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