Nigerian National Petroleum Corporation, NNPC, has said that a further dip in Electricity supply across the country is expected over the next two months as the country is said to be losing about 150 million standard cubic feet, scuf of gas due to pipeline vandalism at different points.
The corporation’s Group Executive Director, Gas and Power, Dr. David Ige, hinted this at the opening ceremony of the Offshore Technology Conference, OTC which commenced in Houston Texas, USA on Monday.
Ige said that the corporation was having a lot of issues that are interlinked with the power sector; for the past two months, as the Escravos-Lagos pipeline between Escaravos and Ojidi and Warri has been down after vandalisation.
He said that “it has taken us this long to repair the pipeline because; the elections meant that the JTF could not provide security for our people to go in there and access the terrain. So it was only now that the elections are over that the people can now go-in there and access the location. At the moment, work is on-going right now to effect that repair.
“In addition to that, the Transforcados pipeline like you know was attacked about four weeks and there was an attempt to repair it but when we tried to bring that back, we noticed further leakages, which I believe has just been fixed or is being fixed right now. With the Transforcados pipeline out, we are losing gas supply from Obein, Sapele and from NPDC, which is a significant capacity that is down on the western side.”
On the Eastern side, he said there has majorly been problem with evacuation, even as the corporation has been able to supply gas to Okpai power plant, the power sector evacuation challenges has made it practically impossible to release power.
“So Okpai sometimes has not been able to operate at full capacity.
We are able to supply to Ibom power but Ibom power has been operating at about 50 per cent capacity for quite a few months now. Although the gas is there, the power plant is not working at full capacity. We are able to supply gas to Alaoji but the Alaoji power plant is not able to evacuate power because when Alaoji is on, you cannot evacuate Alaoji and Calabar.
“It is a combination of issues, there was a time that the hydro generation is at its lowest; we have lost 300MW from Shiroro as a result of hydro going down. So, bringing all these together is almost like a perfect storm for a much reduced generation,’’ he explained.
However, he said he believed that over the next couple of weeks, as repair work begins and the rainy season draws nearer; there would be improvement in power supply because all the problems are actually short-term induced problems.
On gas pricing, Ige said gas price should not be an issue for producers and consumers because gas price has been increased to export parity in Nigeria, adding that the challenge today is not that of pricing.
Rather, he explained that what has remained a challenge in Nigeria is the mounting gas debts because gas price is not being paid by consumers at the rate at which it is supposed to be paid.
But to provide a soft landing for producers, he stated that in the last couple of months, the Central Bank of Nigeria, CBN has put a programme in place to extinguish some of the legacy debts, adding that, government will make sure that the new volume that are being supplied are actually being paid by end consumers through the power operators back to the gas suppliers.
“I think the issue is not the price; it is more about the collection and payment of that price. Otherwise I see no reason why anybody should complain, our price right now is pretty much at par with reasonable standard. So our domestic gas price is basically competitive.
“And of course, we have room now for willing buyers and willing sellers’ arrangement and you can see that people now negotiate their prices and they can get what the buyers can pay for.
“Overall, there might be a miscommunication about pricing; pricing is at the optimum or close to the optimum now. More importantly there is willing buyers willing sellers’ arrangement anyway, so the market is free but it is just for the market itself to stabilise to a level where people pay for what they take.
“Those who have entered into an agreement before this arrangement will also be accommodated. This is because once the Minister announces the new price for gas it definitely reflects on all gas supply agreement.
“So any gas agreement right now is supposed to reflect the gas pricing for the volume that are within the base load. With this, anybody who is doing a new transaction must do on willing buyer willing seller agreement, so nobody is cut off in this arrangement.”

READ ALSO  DAPPMA tasks Nigerians over unclaimed subsidy