Power supply worsens as 1000mw cut by Forcados pipeline shutdown

Lingering power outages across the country are getting worse, with households and businesses suffering discomfort, rising production costs, lower revenues as well as staff lay-offs. Analysts put the blame on non-availability of gas, as about 80 percent of the power plants, which are gas-fired, are deprived of regular gas supply.

Consumers in several parts of the country are experiencing power outages for several days in a row, owing to the shutdown of the 400,000-barrelscapacity Trans Forcados pipeline which suffered a leakage close to the Forcados export terminal. The pipeline conveys condensate and gas.

The shutdown of the pipeline has suspended the 220 million standard cubic feet (scf) of gas supply to the national power grid.

This translates to more than one gigawatt of power, which is about 1,000 megawatts (MW). By implication, national power supply has reduced by 1,000MW.

The pipeline, which has been out for three weeks, has denied companies like Seplat, the Nigerian Petroleum Development Company (NPDC) and Pan Ocean Company of the capacity to transmit the gas they produce to the nation’s power generating plants.

But David Ige, the group executive director, gas and power, Nigerian National Petroleum Corporation (NNPC), said repair work was being done on the pipeline and that very soon gas supply would be restored to the power stations.

The Escravos-Lagos gas pipeline and Trans Forcados pipeline are the most strategic arteries for gas supply in the country and any stalling on these results in severe supply problems which then hinder power supply.

It is obvious that gas shortage remains a lingering problem and until this is solved, there may not be an end to the epileptic power supply.

Tied to the non-availability of gas for the power sector is the regime of very low gas tariff which has been a major impediment for gas supply to power plants, with analysts stressing the need for government to fast-track the move towards real cost-reflective gas tariff that ensures investment cost-recovery and reasonable return on investment, to give more confidence to private sector investors.

The volume of gas supply shortfall to the domestic gas market has been put at about 400 million standard cubic feet per day (scfd). The power sector is expected to require 3.5 billion cubic feet per day (bcfpd) over the next three years and could require more than 5 bcfpd when some of the power plants to be privatised under the National Integrated Power Project (NIPP) scheme are completed, according to Ecobank Energy, Oil and Gas Research in its Middle Africa Market Update on December 11, 2013.

Nigeria’s power generating capacity has degenerated from 4,200MW in 2012 to 3,463MW per day on the average today. And there is no indication this will improve in the near future. There were even times when power supply went below 3,000MW, especially when the bombed Escravos-Lagos pipeline was undergoing repairs.

In recent times, Lagos State, which houses two distribution companies, has been getting less than 500MW because of low generating capacity.

Chinedu Nebo, minister of power, said the country would be able to generate and have transmission capacity to wheel out 6,000MW by the end of the year.

“That’s what we are projecting from a very technical realistic point of view,” Nebo said, adding that in spite of the fact that South Africa generated 40,000MW, Nigeria presented huge opportunities for investors.

“Even if Nigeria quadruples its generation and transmission capacities, it would not be enough to meet the demand in the country. Nigeria is an investors’ market,” he said.

Commenting on the over-dependence on gas for power supply, Beks Dagogo-Jack, chairman, Presidential Task Force on Power, said government was focusing on fuel diversity as a strategy for energy security.

“For transmission, we are making massive investment to ensure that private investors will be able to wheel the power they generate. We are working to ensure massive availability of power that will drive industrial growth, create jobs and make life better for Nigerians,” he said at the Power Investor Summit in Lagos.

Olusola Bello