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Blackout Looms as Explosion Rocks Escravos Gas Pipeline Again

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  • Blackout Looms as Explosion Rocks Escravos Gas Pipeline Again

Power generation in the country may have hit a fresh snag following the explosion that ruptured the Escravos-Lagos Pipeline on Thursday, even as generation from hydropower plants dropped by 494 megawatts in six days.

There was pandemonium as a heavy explosion rocked the pipeline criss-crossing the Ugbokodo community near the Warri refinery in Okpe Local Government Area of Delta State.

The incident, which sources said occurred around 4am, forced residents of the community to scamper for safety in the bushes when they discovered that the inferno that resulted from the explosion was advancing towards their homes.

It was gathered that some residents, including children, who fled into the bushes, were still missing as of 4:30pm when one of our correspondents left the community.

Investigation revealed that the explosion was as a result of leaks from a gas pipeline in the community, which had earlier been reported to the management of the NGC.

According to the Nigerian National Petroleum Corporation, repair work commenced immediately on the facility in order to address the fresh incident.

The NNPC, however, did not state what caused the fresh explosion on the pipeline.

It took the combined efforts of the men of the fire services of the NGC and the Warri Refining and Petrochemical Company as well as other agencies to put out the fire at about 8am.

No life was lost in the incident, which created panic among residents of the area.

Residents of the community who later protested the development accused the management of the NGC of negligence as the community had reported the malfunctioning pipeline to its Ekpan-Warri office without any action being taken.

The protesters led by the Unuevworo of Ugbokodo community, Chief Tobore Ajisha, alleged that the explosion could have been avoided if the leaking pipeline was immediately fixed when members of the community reported the leakage to NGC officials in writing.

Ajisha stated that the community also placed a call to the management of the Nigeria Gas Processing and Transporting Company when the explosion occurred but the firm allegedly refused to act quickly until the inferno gathered momentum.

Efforts to speak with the NGC’s spokesman in the Warri area office, Violin Antaih, were unsuccessful as calls and SMS sent across to him were not unanswered and not replied.

But confirming the explosion, the Commander of the Joint Task Force, Operation Delta Safe, Rear Admiral Suleiman Apochi, said he had yet to get a full briefing on the development as of the time he was contacted.

This is coming four days after the resumption of gas supply to six power plants – Egbin (Lagos), Omotosho I and II (Ondo), and Olorunsogo I and II and Paras Energy (Ogun) – after the completion of the repair work on the pipeline, which was damaged by a fire incident last week.

The plants did not generate any megawatts of electricity for four straight days until Monday when the Escravos-Lagos Pipeline System, which supplies gas to them, came back on stream.

The nation generates most of its electricity from gas-fired power plants, while output from hydropower plants makes up about 30 per cent of the total generation.

Total electricity generation, which fell slightly to 3,517.5MW as of 6am on Wednesday, January 3, 2018 (the morning after the grid collapse caused by the pipeline fire), rose to 4,102.3MW on Wednesday.

Unutilised generation capacity occasioned by gas constraint dropped to 1,018.7MW as of 6am on Wednesday from 3,133.3MW last Friday, according to the latest data obtained by our correspondents on Sunday from the Ministry of Power, Works and Housing.

But the combined generation from Kainji, Jebba and Shiroro hydro plants, which rose by 580MW to 1,212MW on January 3 and offset most of the losses caused by the shutdown of the six power plants, dropped to 718MW on Wednesday.

Kainji, Jebba and Shiroro generated 370MW, 148MW and 200MW, respectively on Wednesday, from 339MW, 445MW and 428MW on January 3, the data showed.

Jebba did not generate electricity on Monday as five of its units (2G1 to 5) were said to have tripped due to loss of auxiliary supply and 2G6 out due to burnt generator winding and automatic voltage regulator.

Electricity generation from Egbin, the nation’s biggest power station, stood at 398MW as of 6am on Wednesday, compared to 561MW on January 2.

Seven out of the nation’s 28 power plants did not generate any megawatt as of 6am on Wednesday, compared to 14 last Friday. The plants are Sapele I, Alaoji II, Olorunsogo II, Azura-Edo, AES, ASCO, and Trans-Amadi.

When contacted to find out if the fresh damage at ELPS had affected generation at Egbin, a source told one of our correspondents on condition of anonymity that the plant was still generating electricity.

“Egbin is on as we speak and we are still generating. If we start noticing any drop in pressure, we will let you know. We are generating close to 400MW now,” he said.

On January 2 this year, the downstream section of the Escravos to Lagos Pipeline System was razed by a bush fire 2 at Abakila, in Ondo State, a development that led to widespread blackout as gas supply to six power plants was stalled.

The earlier fire incident had affected gas supply to customers in Ondo, Ogun and Lagos, with the subsequent shutdown of some power plants with a combined generating capacity of 1,143MW.

But on Thursday, the Group General Manager, Group Public Affairs Division, NNPC, Ndu Ughamadu, announced another explosion on the facility.

He, however, stated that the corporation’s Group Managing Director, Maikanti Baru, had directed that repair works be executed immediately on the part of the ELP that was ruptured by the fresh explosion along Egbokodo-Omadino so as to restore supplies from Escravos.

Baru further directed that gas supply from other sources like Oben, Oredo, Sapele, Ughelli and Utorogu be stepped up to augment any shortfall, as repair works had commenced on the pipeline.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

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The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

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IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

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South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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