‘Inadequate Gas Supply Is Frustrating NIPP Initiative’

The former chairman of the Nigerian Electricity Regulatory Commission (NERC), and managing director of Aiteo Power and Gas, Dr Ransom Owan, has lamented that inadequate gas supply to thermal power stations is frustrating reform in the sector.

Owan, who spoke at the West African Power Industry Convention (WAPIC) in Lagos, said that the privatization of 10 power stations built under the National Integrated Power Project (NIPP) has been stalled due to irregular gas supply.

Leadership newspaper reports:

He said that the federal government could generate up to US$5.6 billion in the sale of the power plants but pointed out that “lack of gas is stalling the deals.”

The first phase of the NIPP project was designed to generate 4,771 megawatts (MW) from the 10 gas-fired power stations with committed investment to date from the federal, state and local governments in the Niger Delta Power Holding Company (NDPHC) and NIPP amounting to US$8.475 billion. A status report presented at the 31st meeting of the board of directors of the NDPHC held on April 17, 2015, showed that 6 out of the 10 power stations are ready to generate 2,910.1MW of electricity, subject to availability of gas to the plants. The report identified the six NIPP power plants which are already adding power to the national grid.

A breakdown of the generating capacities of these plants showed that the 562.5MW-capacity Calabar Power Station built by Marubeni is now generating 112.5MW; 451MW-capacity Ihovbor Power Plant in Edo State is generating 225MW. Also, the 451MW-capacity Sapele Power Station built by Marubeni currently generates 112.5mw.

Others include the 450MW-capacity Olorunsogo Power Station in Ogun State, which generates 225mw, 450MW-capacity Omotosho Power Station in Okitipupa local government area of Ondo State which generates 225MW and 434.1MW-capacity Geregu Power Station in Kogi State which generates 289.4MW.

The report also disclosed that there are no committed gas supplies for Geregu and Ihovbor. In a recent interview, Yakubu Lawal confirmed that the stations had been shut down due to shortage of gas supply. Lawal said the management had ordered the shut down following the inability of gas suppliers to make available the product.

He also disclosed that other facilities constructed by the NDPHC and due for commissioning was shelved as there was no gas to power them.

The National Economic Council (NEC) under the former administration had approved that each of the generation stations be incorporated as a limited liability company with 80 per cent of their shares offered for sale to private investors. However, the privatization of the 10 plants, scheduled for completion mid last year, has suffered setbacks due to inadequate gas to test-run completed ones.