Energy

Nigeria Records N53.3B Loss To Gas Flaring In Two Months

Published

2 years ago

July 22, 2021

International Oil Companies (IOC) and their local counterparts flared a total of 33.04 billion standard cubic feet of natural gas resulting in a major estimated loss of N53.26 billion to the country in the first two months of this year.

In its latest monthly report, the Nigerian National Petroleum Corporation (NNPC) said the oil firms flared a total of 17.53 billion scf of gas in January, compared to 15.51 billion scf in February, according to data obtained from the Nigerian National Petroleum Corporation.

With the price of natural gas put at $3.93 per 1,000scf as of Wednesday, the 33.04 billion scf flared translates to an estimated loss of $129.85 million or N53.26 billion (using the official exchange rate of N410.13/dollar).

The NNPC report, said out of the 206.05 billion scf produced in February, a total of 133.06 billion scf was commercialised, consisting of 40.15 billion scf and 92.91 billion scf for the domestic and export market respectively.

It said this implied that 64.48 percent of the average daily gas produced was commercialised while the balance of 35.52 percent was re-injected, used as upstream fuel gas or flared.

The gas flare rate was 7.67 percent in February (i.e. 565.52 million standard cubic feet per day), compared to 7.73 percent in January (i.e. 554.01 million scfd).

In January, a total of 223.55 billion scf of natural gas was produced, translating to an average daily production of 7,220.22 million scfd.

Out of the total gas output in January, a total of 149.24 billion scf was commercialised, consisting of 44.29 billion scf and 104.95 billion scf for the domestic and export markets respectively.

This indicates that 67.15 percent of the daily gas output was commercialised while the balance of 32.85 percent was re-injected, used as upstream fuel, or flared, the NNPC said.

According to the revised payment regime for gas flaring, oil firms producing 10,000 barrels of oil or more per day will pay $2 per 1,000 standard cubic feet of gas, compared to N10 per 1,000 scf in the past.

Firms producing less than 10,000 barrels of oil per day will pay a gas flare penalty of $0.5 per 1,000 scf.

The penalties paid by oil and gas companies for flaring gas in the country will be invested to build midstream gas infrastructure in host communities, according to a new provision introduced into the Petroleum Industry Bill (PIB) by the National Assembly.

“Money received from gas flaring penalties by the commission (Nigerian Upstream Regulatory Commission) pursuant to this subsection, shall be transferred to the Midstream Gas Infrastructure Fund for investment in midstream gas infrastructure within the host communities of the settlor on which the penalties are levied,” the Senate and House of Representatives said in subsection (4) of section 104 of the bill.

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Energy

Nigeria and Germany Ink $500 Million Agreements for Renewable Energy and Gas Exports

Published

1 week ago

November 22, 2023

Investors King

Nigerian and German companies have sealed two pivotal agreements in Berlin, valued at $500 million.

The accords, announced by Presidential spokesperson Ajuri Ngelale, include a renewable energy pact and a gas export deal, marking a significant milestone in bilateral cooperation.

The first agreement formalized a Memorandum of Understanding on renewable energy between the Union Bank of Nigeria and Germany’s DWS Group.

This strategic partnership seeks to attract $500 million in investments dedicated to renewable energy projects, with a primary focus on rural communities across Nigeria.

The second Memorandum of Understanding solidified a gas export partnership between Riverside LNG of Nigeria and Germany’s Johannes Schuetze Energy Import AG. Under this deal, Nigeria commits to supplying 850,000 tons of natural gas annually to Germany, with projections indicating an increase to 1.2 million tons.

The initial shipments are scheduled for 2026, addressing both nations’ commitment to environmentally conscious practices and sustainable energy solutions.

This gas export agreement is particularly significant as it contributes to processing approximately 50 million cubic feet per day of natural gas that would otherwise be flared, aligning with Nigeria’s goal to harness its abundant gas resources for sustainable energy projects.

President Bola Tinubu, attending the G20 Compact with Africa conference in Berlin, expressed his approval of the agreements, emphasizing Nigeria’s commitment to reforms. Chancellor Olaf Scholz of Germany also announced a 4 billion euro investment in green energy projects in Africa by 2030, aligning with Germany’s transition to carbon neutrality.

Despite challenges such as oil theft, Nigeria, under President Tinubu’s leadership, has undertaken significant reforms to attract investors and revitalize its economy.

These agreements signify a step toward sustainable energy solutions, addressing environmental concerns and fostering economic growth in both nations.

Energy

Sun Africa Commits $2.2 Billion to Transform Nigeria’s Power Sector

Published

2 weeks ago

November 20, 2023

Investors King

Sun Africa LLC, a global entity dedicated to supporting Africa’s energy needs, has announced a commitment of approximately $2.2 billion for the development of Nigeria’s power sector.

The pledge follows a meeting between the Minister of Power, Adebayo Adelabu, and representatives from Sun Africa, led by Chairman Goran Rajsic.

In the initial phase, the project will concentrate on delivering 961 MWp of solar PV infrastructure and 455 MWh of battery energy storage, marking a transformative venture valued at $2.2 billion.

This strategic collaboration aims to address Nigeria’s growing demand for new power infrastructure, aligning with the nation’s economic needs and transitioning toward sustainability.

Adelabu emphasized Nigeria’s significant requirement for new power infrastructure to support economic growth and sustainability.

The commitment from Sun Africa and its partners signifies a crucial step toward achieving Nigeria’s electricity goals.

Goran Rajsic expressed gratitude to the project partners, highlighting the support in designing a comprehensive solution featuring cutting-edge solar PV and battery storage technologies.

Sun Africa’s collaboration with Sterling & Wilson Renewable Energy Limited as its EPC partner represents a milestone in advancing sustainable and reliable energy solutions for Nigeria.

This initiative aligns with the nation’s commitment to driving positive change through innovative renewable energy solutions.

Energy

Niger Delta Power Holding Company Reveals N190bn Debt Owed by Government Entities

Published

2 weeks ago

November 14, 2023

Investors King

The Niger Delta Power Holding Company (NDPHC) has disclosed that the Central Bank of Nigeria (CBN), the Nigerian Bulk Electricity Trading Plc (NBET), and the Nigerian Electricity Liability Management Company owe a cumulative sum of N190 billion for electricity supply.

Chiedu Ugbo, the Managing Director and CEO of NDPHC, shared this information during a media briefing in Lagos.

Ugbo highlighted that the N190 billion debt has accumulated from 2015 to May 2023. While the exact amount owed by NBET wasn’t specified, Ugbo emphasized that the huge indebtedness to NDPHC runs into hundreds of billions, affecting the company’s operations and financial obligations.

He stated, “NDPHC is also not paid for availability but only as dispatched, thereby depriving NDPHC of hundreds of billions since 2015 when the Transitional Electricity Market was declared, and the government has so far been denied revenue as high as N3trn.”

Ugbo emphasized the challenging situation the debt has created, making it difficult for NDPHC to meet operational expenditures, pay gas suppliers, and maintain regular power generation.

To overcome these challenges, he called for urgent private capital mobilization and explored independent transmission projects, involving Gencos as investors.

Executive Director, Generation, Engr. Abdullahi Kassim, highlighted the ‘Light-up Nigeria Initiative,’ a program aimed at leveraging NDPHC’s generation assets to provide reliable power supply to eligible customers, distribution companies, and third-party project developers, ultimately achieving over 97% power distribution to the masses.