20 January 2016

Nigeria: Escravos Attack - Nigerian Govt. Losing N471 Million Daily in Gas, Electricity Disruptions

The Nigerian government on Tuesday counted its costs in terms of multiple losses suffered in massive disruption to gas and electricity supplies in the wake of last weekend's attacks on the Nigerian Gas Company's gas pipeline by suspected Niger Delta militants.

Government said the attack on the Escravos Lagos Pipeline System (ELPS) connected to Chevron Nigeria Limited's gas network at Escravos negatively impacted on the 600 mega watts (MW) Olorunsogo National Integrated Power Plant and other critical power projects in the region.

The immediate impact of the sabotage on the gas facility, Federal Ministry of Power sources said, has been the disruption in the sale and supply of 160 million metres standard cubic feet per day (MMSCD) of gas to operators of electricity generation facilities and a cut in electricity supply from the affected power plants.

Already a massive manhunt for the culprits by security operatives has intensified to determine the motive behind the sabotage.

Close followers of the Niger Delta crisis say the attack may not be unconnected with recent threats by one of the militant group leaders to disrupt operations in key oil and gas facilities in the region if government insisted on his response to the Economic and Financial Crimes Commision's invitation for questioning.

Government computation on the extent of loss showed that at about cost $2.50 per thousand standard cubic feet of gas, the country was suffering an estimated $400,000 (about N78.8 million) loss daily through the inability to meet its gas supply obligations to its customers.

The loss does not include about $1,988,223 (about N391.7 million) lost daily by operators of the affected power generation plants for not supplying electricity to their customers.

When the estimated cost of about $609,137 (about N120 million) for the repairs of the damaged pipeline is added, the Nigerian government and the people would have suffered a loss of about N590.5 million to the incident.

Equally, the real sector of the economy has also been counting its losses as operations at some cement companies around Olorunsogo area in Ondo state, including Ewekoro and Ibese factories, have been brought to a halt.

The Federal Ministry of Power, Works and Housing said the incident was a huge setback on its effort in collaboration with Ministry of Petroleum Resources and allied agencies to improve gas supplies to the power plants in the country.

The ministry said such efforts had resulted in some hitherto idle power plants like Ihovbor and Sapele being brought back on stream and contributing significantly to the power supply situation in the country.

The gas pipeline systems in the region has been the butt of incessant attacks in recent times, as records showed that at least six incidents of vandalism occured on the Trans Forcados Pipeline (at Oben, Sapele, Oredo ) and Escravos Lagos Pipeline System (ELPS) between December 2014 and February 2015, resulting in a loss of about 1,100 MMSCFD of gas supplies.

Industry experts say a loss of about 200 MMSCD of gas was equivalent to a reduction in electricity supply of about 700 MW.

With national power generation capacity currently at an average of 4,120 MW as at last Sunday, the huge impact of the incident would best be imagined.

At the recent monthly meeting with operators in the power sector, Minister of Power, Works and Housing, Babatunde Fashola, had expressed optimism that gas projects scheduled for completion in the second quarter of 2016 would significantly improve gas supply to key power plants in the country.

Although Mr. Fashola also highlighted some of the challenges, especially related to security affecting delivery of gas to the power sector, he assured that active monitoring activities were in place, particularly on the pipelines, to stop further attacks.

Nigeria

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