Gencos accused of rejecting gas supply

The Nigerian National Petroleum Corporation (NNPC) has accused the power generating companies of rejecting gas supplied them, contrary to reports that lack of gas has been responsible for low power generation in the country.

According to Maikanti Baru, group managing director of the NNPC, who disclosed in his one year report card as the helmsman of the organisation, the corporation has made tremendous efforts to enhance gas supply to the power sector but unfortunately, the generation companies are now rejecting gas from the corporation.

Baru said gas supply to power plants and industries in the country had been significantly increased and listed the accomplishments of the corporation in the sector to include: Completion of the repairs of the vandalised 20” Escravos Lagos Pipeline System A (ELPS –A) in August 2016 which ramped up Chevron Escravos Gas plant supply, from nil to 259MMscfd and the completion of repairs of the vandalised Chevron offshore gas pipeline in February 2017 which likewise peaked the company’s gas supply to 430MMscfd.

“Other accomplishments under this category are: the completion of repair works on the vandalised 48” Forcados Oil Terminal (FOT) export gas pipeline in June 2017, which had reactivated shut down gas plants, including Oredo Gas Plant, Sapele Gas Plant, Ovade Gas Plant, Oben and NGC Gas Compressors; and the commissioning of NPDC’s Utorogu NAG2 and Oredo EPF 2 gas plants.

Baru explained that the concomitant effect of the efforts was a significant growth in domestic gas supply in the last few months, adding that during the period, domestic gas supply had increased from an average of 700MMscf in July 2016 to an average of 1,220MMscfd currently, with about 75 per cent of the volume supplied to thermal power plants.

“A lot of Generation Companies (GENCOs) are rejecting gas due to the inability of the Transmission Company of Nigeria (TCN) to wheel-out the power generated”, Baru said.

But investigations reveal that the GENCOs refusal to take gas was because the electricity distribution companies declined to take the power supplied them by the Transmission Company of Nigeria (TCN).

Further investigations however revealed that the Discos rejected the power supply because they could not get it across to a particular group of customers whom they considered would be able to pay for the supply.

A source close to the generating companies told BusinessDay that apart from the limitations of TCN, the Discos have embarked on a systematic supply of power to those customers living in areas where they can readily collect their revenue, which explains why some areas get power on a more consistent basis than some other areas.

He said that Discos are afraid of bills that would come from the Gencos in the event of Discos receiving all the power that is wheeled to their networks which they may not be able to collect payment upon because of customer default.

 

Olusola Bello and Kelechi Ewuzie