Nigeria Content Online

The
federal government yesterday warned the Power Holding Company of
Nigeria (PHCN), and gas supply companies in the country, that it would
no longer tolerate inadequate gas supply as reason for failure to
supply electricity to consumers.

Despite various
deadlines by government in the last eight years towards improved power
generation capacity, inadequate gas supply by the joint venture oil
producing companies has often been cited as reason for the inability of
the PHCN, and other independent power producing companies, to meet the
mandate.

At the signing of
the gas supply and purchase agreement (GSPA) for the supply of gas for
power generation yesterday in Abuja, Dieziani Alison-Madueke, the
minister for petroleum resources, said government has provided enough
incentive to guarantee adequate supply of gas for electricity
generation in the country. The agreement was executed between Egbin
Generating Company Limited (a subsidiary of the PHCN), and the Nigerian
National Petroleum Corporation (NNPC)/Pan Ocean Joint Venture for the
supply of 65 million standard cubic feet of gas per day from the Pan
Ocean Oil Company of Nigeria (PANOCO)’s Ogharafe gas plant to Egbin
Power Station in Lagos.

Pan Ocean is one of
the three gas suppliers that would be servicing Egbin, one of Nigeria’s
power generating plants, currently accounting for more than half of the
country’s available power supply capacity. The other suppliers include
NNPC/Shell Petroleum Development Company (SPDC) joint venture and their
Chevron Nigeria Limited (CNL) counterparts.

Over N150 billion invested annually

According to Mrs.
Alison-Madueke, government in the last three years has, through the
various joint venture oil companies operating in the nation’s petroleum
industry, invested an average of $1 billion (about N150 billion)
annually on the development of gas supply infrastructures and the
domestic gas market. This figure, she said, is about to grow
considerably for both government and the JV partners as the government
is poised to aggressively pursue the development of the National Gas
Master Plan as well as the execution of various projects to realize the
agenda in the power sector.

The new gas pact,
the minister explained, would not only help address the fundamental
challenge of gas-to-power, but would provide the world class GSPA
template for the country’s domestic gas-to-power market. The template,
which is a product of wide consultation with different people,
stipulates all terms and conditions for effective and bankable supply
for the gas-to-power as part of the critical steps necessary to rapidly
reposition the nation’s domestic gas market both for sustainability and
to encourage potential investors in independent power projects in the
country.

“To facilitate the
conclusion of government’s effort to entrench a world class sustainable
commercial framework for gas-to-power in the country, other planned
suppliers to Egbin, notably Shell and Chevron JVs, have been mandated
to step up discussions and ensure a timely closure of their respective
agreements for execution latest by June 18 next week,” she said.

Nuhu Wya, minister of power, who noted the benefits of the
collaboration between the ministry and the JV partners said that with
the various gas supply agreements in place in the industry, the power
generation and gas supply companies would no longer have any excuse for
not delivering electricity to Nigerians in line with government
national aspirations.