When the Minister of Petroleum, Diezani-Allisson Madueke, at the Abuja Gas Retreat described the awful shortfall in domestic gas supply to the government’s Independent Power Project (IPP) as of “national importance,” she must have meant to say “a national reproach” as this is already threatening the government’s capability to improve the pathetic power supply situation in the country.
Now all we are talking is securing natural gas from those who produce it. We have not even started talking about how, when finally available, we are going to take the gas to the power plants because as we talk, the infrastructures for the gas delivery are still in the realm of the spirit.
Truth be told, the biggest problem in this gas bog is that the platform for synergy between the Ministry of Power and that of Petroleum for this critical issue of availability of the resource hangs on cardboard paper and reinforced with insincerity and deceit. The need to align or rather re-align all stakeholders and agencies in this gas matter cannot be overemphasized. While the power minister Barth Nnaji is busy seeking concrete positions from the gas producers on who would produce the gas and how the gas transportation would work, the petroleum minister who knows her industry well is insisting that first, the issue of appropriate pricing of the feedstock gas has to be addressed if a single bubble is to be freed for the power projects.
Is it not funny that Nigeria as a country claimed to have attained the installed capacity to generate 5, 000 megawatts of electricity but lack of natural gas to fire the power stations is hampering the actual realisation of the claimed installed capacity? It is even funnier that the Power Minister had to wait to finish installing the machines to generate 5, 000 megawatts before “seeking concrete positions from the gas producers on who would produce the gas and how the gas transportation to the power plants would work.”
Are these people in authourity not aware that Nigerians are fully tired of complains and excuses on why we cannot get steady power supply for few hours on stretch in one day? It is very worrying that up till now, we are still talking of availability of adequate gas supply to the nation’s thermal stations as impediment to the IPP initiative. More worrying is the fact that somebody sat down to package the IPP initiative without factoring-in the very critical determinant of availability of natural gas to fire the turbines. With all the billions of dollars and trillions of Naira already sunk into the IPP initiative, the dream of generating and distributing enough electric power to give Nigerians at least up to three hours supply a day is still a mirage.
The fact of the matter is that all the power plants put together on full stream would require about 22 billion standard cubic feet of gas (scft) per day going by the calculation that to generate one megawatt of electricity would require 4 million standard cubic feet of gas. And at the moment, all that is available as gas for the thermal power plants is less than 100 million standard cubic feet and this even evapourating fast.
Gas supply shortfall for the few plants that are fully ready is currently about 100 million scft per day and it is projected to steadily increase to about 400 million scft per day by the end of 2012 as was revealed at the recent Abuja Gas Retreat. As was rightly said by the petroleum minister, there is no doubt that extraordinary measures are required to address this gas issue. According to the petroleum minister, “We have looked copiously at the situation and it is clear that there have been quite a few slippages in the number of our gas supply plans. I think the time has come now to not only look at the possible options for mediative measures but to look beyond that and look at the critical solutions to get beyond this point no matter how drastic those solutions may be.
"We are fully aware of where the slippages have been or are at the moment. We are fully aware of the options 1, 2, 3, as the case may be in each situation and we know that until we take very drastic measures we will not be able to meet those obligations. I, therefore, ask that you take this remedy seriously because on our side we will do whatever we have to close this gap over the next 12, 18, 24 months.” Why is it taking the federal government so drag to make up its mind on what to do about sourcing and paying for the natural gas? The people in government should know that the current price regime in the country is unattractive to the producers who would rather prefer to pipe their produced natural gas to the various LNG initiatives.
The only reason why we are in this pathetic situation is simply because the government-owned Nigerian Gas Company, a strategic business unit of the NNPC does not produce a single bubble of gas whether natural or supernatural. All the NGC does is collect from the operators (IOCs) and sell at government’s determined rate. Is this not pathetic? And the multinational producers are now insisting they want to deal directly with whosoever wants to buy their gas at market-driven prices. And until that is sorted out, the nation’s dream of using its abundant gas resources to sustainably generate power will remain a mirage for a very long time.
On the supply side of this gas bog, the federal government commendably imposed a domestic supply obligation in 2008 but despite backing this by a Regulation, performance has remained abysmally poor. This has resulted in the current crisis in supply. The reason is that government has not actually shown enough seriousness in addressing the genuine issues in this problem of freeing natural for our power generation. Government should work out with the oil companies (the producers) the modalities for executing a market-based pricing regime for gas supply to power plants as this issue is fast becoming a reproach to the genuine and good intentions of government in making adequate power available to the Nigerian people.
IFEANYI IZEZE IS AN ABUJA-BASED CONSULTANT ON STRATEGY AND COMMUNICATION (iizeze@yahoo.com)
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