Gas shortage: Egbin opens talks with other asset owners

Worried by the incessant cases of gas pipeline destruction by miscreants, which has led to massive power outages in the country, the management of Egbin Power plc has entered into discussions with owners of gas assets close to Lagos.

The move if successful, would guarantee gas supply with little interruption by the miscreants who are bent on crippling the power sector through the destruction of gas pipelines across the country.

Nigeria currently has the capacity to generate 5,500 megawatts (MW) of electricity but it has consistently generated below 4,000mw because of the activities miscreants who frequently burst the gas pipelines.

Though the management of Egbin Power plc, a  1,320 megawatts installed capacity  company is not disclosing the names of the gas asset owners it is discussing with, it however assures that by the time the deals are completed, the power plants would be able to minimise  the level gas supply interruption and serve its publics better.

Confirming this to BusinessDay on the sideline at the commissioning of the 220 megawatts Steam Turbine, Unit 6 of  Egbin Power PLC, Kola Adesina, chairman of the board of directors of the  company said: “We are looking at gas field assets that are closer  to Egbin with the mission of developing those gas fields to enable  supply come to Egbin as well. We are not looking at a unipolar model but several options

to be able to get gas to the plants. We are currently in conversation with a number of companies exploring oil and gas around Lagos.

read also: Pension funds N2.8 trn in bonds mean harder path for stock rebound

Adesina said the approach of the private sector is quite different from the public sector, and that for many reasons , private sector operators  put their money where  their mouth is “In order to generate electricity, we know that the value chain is weak in certain respects. And what we are doing is to make massive investment not just in generation, but to support government in transmission, as well as gas, such that we develop a very unique model of recovering our investments.

“At the end of the day, because what is important, for you as a  generation person is not just to generate but for that generation to get to the common man on the street and the industries. If it does not get there, it means we have done  nothing. So part of what we are engaging in actively now, is to inject investment in both generation and gas supply.”

Speaking in the same vein, Mike Uzoigwe , managing director of Egbin Power Plant, said with this new concept, the most important thing would be for the investor  to have his own gas fields or wells available if vandalization continues without abating.

“If people continue to vandalise the gas  pipelines,  you then  continue to think  of what to do about the gas usage vis a viz  the power plant. The good thing about this  is that when investors  see  that they can get gas  from another source, they would begin to invest and pay you for  the gas they are taking from you”.

Uzoigwe said the energy from such arrangements would attract more tariff, as it is going to be willing sellers and willing buyers, adding that it is not going to be forced on anybody.

The Egbin Power plc boss said the arrangement would have to properly negotiated among interested parties.

President Goodluck Jonathan at the weekend commissioned the 220 megawatts rehabilitated gas turbine at Egbin Power Station in Lagos.

The president promised Nigerians that epileptic power supply would soon be a thing of the past. He noted his administration’s power sector reforms were beginning to yield the desired results.

He recalled that since he launched the power sector roadmap in 2010 in Lagos, the sector had witnessed remarkable progress with several moribund power stations and plants being rehabilitated with others having their capacities boosted.

For the Egbin Power Station, the president expressed delight with the recent rehabilitation. The station can now contribute 1,320 megawatts of electricity to the national grid.

He said, “With this rehabilitation, the station has been restored to its full capacity of1320 megawatts for the first time in the history of the facility. Since we launched the roadmap in 2006, I have been encouraged by the progress we have made. And this is part of our transformational efforts in the power sector.

“Very soon, the problem of epileptic power supply will be history in this country. We shall be out of darkness. With the progress we have made, there will be no going back, we must stabilise power in the country. We are laying a sound foundation for a reliable and sustainable electricity industry.

“We are diversifying our energy sources. That is why we are exploring the prospects offered by coal and other sources. We can’t claim to be the largest economy in Africa without a stable power industry,” the president added.

Olusola Bello