.Producers set to improve gas supply to power plants
.IOCs, independents, indigenous companies, gas association, analysts commend President, Gas Minister for intervention
.’No more excuse preventing Nigerians from enjoying improved electricity supply’
UGO AMADI
The federal government has made a strategic move to restore confidence in nation’s energy sector with the validation and settlement of gas to power arrears for six gas producing companies in Nigeria to the tune of One hundred and eight five billion, four hundred and eighty- eight million , three hundred and nine thousand ,five hundred and ninety seven naira ,fourteen kobo (N185,488,309,597.14).
President Bola Ahmed Tinubu’s approval contained in a document exclusively sighted by Champion Newspapers, noted that the settlement of the outstanding legacy debt owned to gas producing companies in Nigeria for the period of 2011 to August 2023 is a landmark achievement to resolve the decade-long issue of gas-to-power debts, marking a significant milestone in the country’s power sector.
According to the document gas producers and Nigerian Electricity regulatory commission (NERC) examined and verified the entire amount that the federal government authorized. Also, the firms will settle these verified claims by deducting them from their royalties from 2025. The companies include , SPDC, Chevron, ND western, Seplat, Hiers holding and NEPL.
An industry source who is knowledgeable in the matter , affirmed that with this latest development, Gas producers is set to improve Gas supply to Power plants now debts have been settled, we hope to see reduced outages: that means Stable gas supply will minimize power outages. Also, this will guarantee reliable electricity, which will boost economic activity, Increased Investor Confidence and attract new investments in the energy sector.
This is coming when the Minister of State Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo who spoke at the Gastech 2024 Ministerial panel in Houston Texas assured global leaders that Nigeria is open for business as His Excellency, President Bola Ahmed Tinubu GCFR has executed Policy Directives to improve the investment climate that will position Nigeria as the preferred investment destination for energy sector in Africa.
‘’Nigeria is open for business” and we have a conducive environment ready to welcome investments and partnerships in the gas sector.
According to him ‘’our President has implemented Policy directives that will guarantee investment in the sector. This is in keeping with dedicated efforts to remove obstacles to investments in Nigeria, thereby harnessing the nation’s resources and diversifying the economy for the benefit of all Nigerians
According to him ‘’The Panel offered us the opportunity to restate Nigeria’s position that energy transition must be just and equitable, to ensure that Countries like Nigeria are able to achieve the transition, while also meeting the energy demands of our people and eradicate energy poverty for economic growth and development.
Regarding the legacy debt issue for thermal power plants, the Minister assured that the President has drawn a line under the issue. Stressing further that the he has also directed the decade of gas secretariat to immediately develop actions to address any unpaid gas to power bills from September 2023 to the present and will provide a long-term solution to make sure unpaid gas to power bills don’t accumulate.
He noted that ‘’the most crucial thing that gas providers, Gencos, and discos need to do is make sure that the President’s support is translated into better electrical supplies for Nigerians. There’s no longer a reason that prevents additional gas from entering power plants.
‘’ We also need to move more quickly on the other gas commitments: Better and more reasonably priced cooking gas (LPG), the safe completion of the OB3 bridge, and two further final investment decisions for gas supply projects, including the signing of the GSA for $3 bln Brass Petrochemical Project. He stated.
It would be recalled that The gas-to-power debt crisis began in the early 2010s, when Nigeria’s power generation companies (GenCos) struggled to pay for gas supplies due to: Inadequate tariffs, Inefficient transmission infrastructure and Limited access to financing .Which invariably led to accumulated debts of over $2 billion, reduced gas supply to power plants, Frequent power outages and Economic losses for stakeholders.
Also, the Coordinator Decade of Gas Secretariat, Ed Ubong had stated at the NIES conference in Abuja early this year that the settlement of gas to power debt will be a major milestone to addressing the challenges in the power sector which will invariably boost economic activity in the nation.
However, the implication of the approval is that ,there is no excuse to bring more volumes of gas to power plants as Nigeria government has settled the payment in outstanding debts owed to gas companies providing gas supply in the Nigerian power sector.
Daily Champion findings report that Nigeria gets more than 70 percent of its electricity from thermal power plants that run on gas. The remaining amount of electricity comes from hydropower-generating plants.
As part of the Federal Government’s efforts to resolve the issues as well as enhance gas deliverables to the power plants, the Federal Government made an initial partial payment of $120 million out of the approximately $1 billion gas debts by the first quarter of 2024.
Daily Champion gathered from inside sources that stakeholders are excited with the president Tinubu’s interventions ,as details of all the timeline has been agreed by all of them. “This approval marks a new era for Nigeria’s gas to power sector.” Says IPPG Chairman , Mr Abdulrazaq Isah, “We’re committed to supplying gas to power plants, ensuring Nigeria’s energy security.”
===Champion Newspapers ====
