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1143Mw Recovered as Escravos-Lagos Pipeline Resumes Gas Supply



  • 1143Mw Recovered as Escravos-Lagos Pipeline Resumes Gas Supply

The Escravos-Lagos Pipeline (ELP). damaged by fire last week, has been fixed, resulting in gas supply to customers on the line, including power generating companies.

The resumption of gas supply, has also led to the recovery of 1143Megawatts lost to the incident.

The Nigerian National Petroleum Corporation (NNPC), which made this known yesterday in a statement, said the repair work followed the directive by the Group Managing Director, Dr. Maikanti Baru, to carry out an assessment of the damage with a view to getting a prompt solution.

The statement, issued by NNPC Group General Manager, Group Public Affairs Division, Ndu Ughamadu, said a section of the ELP at Abakila in Ondo State blew up in flames on January 2, 2018 as a result of bush fire, saying the accident affected gas supply to customers in Ondo, Ogun and Lagos states, with subsequent shutdown of a number of power plants.

He said with the restoration of the ELP and resumption of gas supply, the affected power plants with a combined generating capacity of 1143Mw, are now in a position to resume power generation soon.

Ughamadu listed the affected power plants to include: Egbin in Lagos State; Olorunshogo, PEL Olorunshogo and Paras Power plant in Ogun State; and Omotosho in Ondo State.

The 36-inch Escravos to Lagos Pipeline System (ELPS), is a natural gas pipeline built in 1989 to supply gas from Escravos in the Niger Delta, to various consumption utilisation areas, in the South-west and also feeds the West African Gas Pipeline System.

Meanwhile, the Minister of Power Works and Housing, Babatunde Fashola, said yesterday that the ministry plans to expand the distribution network of the electricity Distribution Companies (DisCos) to incorporate the 2,000Mw that has been stranded.

He said: “We are putting together a policy to help expand the distribution network of the DisCos and use this to distribute the 2000Mw currently available, but cannot be distributed.”

He called on manufacturers to make available information on their location and the amount of power they need from the undistributed 2,000Mw.

Fashola, who spoke at the 23rd Monthly Power Sector Operators meeting in Lafia, Nasarawa State, urged the sector to work harder this year to increase people’s access to meters and reduce the incidents of estimated billing, stressing that the Nigeria Electricity Regulatory Commission (NERC), would conclude the Meter Regulations that will open up the meters’ supply and installation business.

FasholaHe regretted that in the “first few days of the new year, we suffered a set back to our power supply which was caused by damage to the gas supply network around Okada.”

He said NNPC had last night informed the ministry on the completion of the repairs, saying what was left was to test the lines and restore pressure and supply gas to the generation companies.

Fashola said: “One-by-one, all the stakeholders from GenCos, TCN and DisCos will work to restore supply to the levels they were before the pipeline damage,” saying a few months ago, the Nigerian Electricity Regulatory Commission (NERC) formally presented the Mini Grid Regulations to the government.

He said last month in Abuja, Nigeria through the Rural Electrification Agency, hosted a Mini Grids Summit that is the largest ever attended in Africa with 600 participants from about 40 countries.

Fashola said the emphasis now is on “mini grids that will help us connect more people and boost incremental power.”

Giving account of the progress that has been made so far, he said generated power has gone up to 7000 Mw in 2017 from 3,000 Mw in May, 2015, adding that Transmission Capacity has peaked at 6900Mw in 2017 from about 5,000 Mw in May 2015.

He said “Distribution was now averaging 5,000 Mw in 2017, as against its 2650Mw in 2015.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend




Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.


  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return



Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather




Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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