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Egbin Decries N388B NBET Debt, Idle Capacity

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Egbin-Power-Plant - Investors King

Egbin Power Plc, the biggest power station in Nigeria, has said it is owed N388bn by the Nigerian Bulk Electricity Trading Plc for electricity generated and fed into the national grid.

The company disclosed this on Tuesday during an oversight visit by the Senate Committee on Privatisation, led by its Chairman, Senator Theodore Orji, to the power station, located in Ikorodu, Lagos.

The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells it to the distribution companies, which then supply it to the consumers.

The Group Managing Director, Sahara Power Group, Mr. Kola Adesina, told the lawmakers that the total amount owed to Egbin by NBET included money for actual energy wheeled out, interest for late payments and available capacity payments.

Egbin is one of the operating entities of Sahara Power Group, which is an affiliate of Sahara Group. The plant has an installed capacity of 1,320MW consisting of six turbines of 220 megawatts each.

The company said from 2020 till date, the plant had been unable to utilize 175MW of its available capacity due to gas and transmission constraints.

Adesina said, “At the time when we took over this asset, we were generating averagely 400MW of electricity; today, we are averaging about 800MW. At a point in time, we went as high as 1,100MW. Invariably, this is an asset of strategic importance to Nigeria.

“The plant needs to be nurtured and maintained. If you don’t give this plant gas, there won’t be electricity. Gas is not within our control.

“Our availability is limited to the regularity of gas that we receive. The more irregular the gas supply, the less likely there will be electricity.”

He noted that if the power generated at the station was not evacuated by the Transmission Company of Nigeria, it would be useless.

Adesina said, “Unfortunately, as of today, technology has not allowed the power of this size to be stored; so, we can’t keep it anywhere.

“So, invariably, we will have to switch off the plant, and when we switch off the plant, we have to pay our workers irrespective of whether there is gas or transmission.

“Sadly, the plant is aging. So, this plant requires more nurturing and maintenance for it to remain readily available for Nigerians.

“Now, where you have exchange rate move from N157/$1 during acquisition in 2013 to N502-N505/$1 in 2021, and the revenue profile is not in any way commensurate to that significant change, then we have a very serious problem.”

He said at the meeting of the Association of Power Generation Companies on Monday, members raised concern about the debts owed to them.

He added, “All the owners were there, and the concern that was expressed was that this money that is being owed, when are we going to get paid?

“The longer it takes us to be paid, the more detrimental to the health and wellbeing our machines and more importantly, to our staff.”

Adesina lamented that the country’s power generation had been hovering around 4,000MW in recent years.

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Energy

Nigeria Loses N184 Billion to Gas Flaring in H1 2022

Nigeria lost N184 billion to gas flaring in the first half (H1) of 2022, the Nigerian Oil Spill Monitor.

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Oil and Gas

Nigeria, Africa’s largest economy, lost N184 billion to gas flaring in the first half (H1) of 2022, the Nigerian Oil Spill Monitor, a unit under the Nigerian Oil Spill Detection and Response Agency (NOSDRA), reported on Sunday.

Despite Nigeria’s huge gas deposits, Africa’s largest economy continues to struggle with the necessary infrastructure needed to convert gas flaring to useful natural liquified gas. In the last 18 months, Nigeria has lost almost a trillion Naira in gas value.

The report showed that Nigeria lost a total sum of N707 billion in 2021 alone while another N184 billion was lost in the first half of 2022.

NOSDRA report noted that gas companies operating in the country flared 126 billion standard cubic feet (SCF) of gas in the first six months of 2022, resulting in $441.2 million or N188.887 billion (using the I&E exchange rate) lost.

Further analysis of the report showed that oil firms operating in the offshore oilfields flared 62.2 billion SCF of gas valued at $217.6 million in the first half of 2022. However, companies operating onshore flared a total of 63.9 billion SCF, estimated at $223.6 million.

Speaking on the situation, Prof. Olalekan Olafuyi, the Chairman of the Society of Petroleum Engineers (SPE), Nigeria Council, in an interview on Sunday, said the Federal Government is working on raising gas flaring penalties to further compel oil companies operating in the country to comply with the existing gas policy.

He said “We are working closely with the Nigerian Upstream Petroleum Regulatory Commission, and I can categorically say that companies who flare gas will now pay more than those utilising it. So, it will be to their advantage to start thinking of ways to utilise their gas instead of flaring them.”

Presently, the federal government imposed a penalty of $2 on 1000 SCF of gas flared by oil companies producing above 10,000 barrels per day (bpd). While companies producing less than 10,000 bpd are fined $0.5 per 1000 scf of gas flared.

Even though Olafuyi did not state how much increase the new rate would attract, he said the Federal Government is working with the Nigerian Upstream Petroleum Regulatory Commission (BUPRC) to devise a suitable penalty increase.

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NNPCL to Lead Africa’s Transition to Clean Energy

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NNPC - Investors King

The Nigerian National Petroleum Company Limited (NNPCL) has set itself up to lead Africa’s transition to a more sustainable energy source.

The Chief Executive Officer and Group Managing Director, NNPCL, Malam Mele Kyari, made this announcement during his lecture at the 30th Convocation of the Federal University of Technology Minna, Niger State.

The lecture titled “Energy Transition & Energy AccessibilityThe New Paradigm” focused on how NNPCL can transit to low-carbon energy and renewables.

According to Kyari, the national energy company is expanding its use of natural gas and infrastructure backbone from Ajaokuta in Kogi state to Kano via Abuja and Kaduna.

In addition, he stated that this massive pipeline will receive fuel from the Obiafu-Obrikom-Oben (OB3) and Escravos-Lagos Pipeline System (ELPS) gas pipelines through the Oben node in Edo State and transport 2 billion standard cubic feet of natural gas to power plants and industrial off-takers in Abuja, Kaduna, and Kano.

He went on to say that as a national oil company and a major participant worldwide, NNPCL is prepared to transition to renewable energy.

“We are taking a firm position in this transformation by institutionalizing the required enablers for success,” the GMD hinted.

As an Energy Company of Global Excellence, NNPCL has changed the NNPCL R&D Division into a Renewable Energy Division, Kyari stated.

He further said NNPCL welcomes collaborative relationships with academics and business professionals who may conduct fruitful research and innovation in the energy sector.

He asserts that oil will continue to play a significant role in the global energy mix of the present and the future.

However, Kyari pointed out that as the shift to less expensive energy picks up speed, particularly in developed nations, oil companies must continually boost operational effectiveness and cut costs to be competitive.

He said earlier in the presentation that Africa is particularly blessed with an abundance of sunshine, which may enable a significant development of renewable energy and place Africa on the map of the world’s energy-sufficient regions.

Kyari said “what Africa needs is energy transition that addresses energy poverty across the continent and supports the use of comparative and cheaper available energy resources in Africa” in light of the financial strain required to move at the same rate as the rest of the globe.

Benefits of the New NNPCL

Transparency and good governance

Nigeria’s oil and gas company, NNPCL, is set to be privatized with the sale of shares to the public, like Petrobras of Brazil and Aramco of Saudi Arabia. Prior to the transition, political interference, lack of transparency and accountability, and bureaucracy shrouded the activities of the Company. The new development must be approved by the government and endorsed by the National Economic Council on behalf of the federation.

Increased revenue to the government

The transition is expected to increase the revenue base of the government. NNPC would soon emerge as the fifth-largest gas-producing in the world, adding that the new legislation would provide business opportunities that would enable it to earn more revenue for the country.

Speaking on the development, Dr Muda Yusuf, Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), said the transition would now absolve the state-owned oil company from political interference and bureaucratic bottlenecks.

“We will see an NNPC that is independent and autonomous and an NNPC that would be decoupled or insulated from political interference and bureaucracy,” Yusuf said.

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Nigeria Sells $1 Billion Worth of Natural Gas to Portugal in 2022 – NNPC

The Federal Government of Nigeria has sold natural gas worth $1 billion to Portugal in 2022, according to the Nigerian National Petroleum Company (NNPC).

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Gas-Pipeline

The Federal Government of Nigeria has sold natural gas worth $1 billion to Portugal in 2022, according to the Nigerian National Petroleum Company (NNPC).

Mele Kyari, the Chief Executive Officer, NNPC, was quoted as saying at the Nigeria-Portugal Business and Trade Forum attended by President Muhammadu Buhari.

The NNPC boss said Portugal has been purchasing Nigeria’s energy for decades now and explained that President Buhari is on a state visit to Portugal for the second United Nations Ocean Conference.

He said “President Muhammadu Buhari is on a state visit to Portugal for the second United Nations Ocean Conference.

“On the sidelines of the event, President Muhammadu Buhari is leading a high-level Nigerian business delegation to the Nigeria-Portugal Business & Trade Forum.

“On the President’s delegation is the CEO NNPC Ltd, Mallam Mele Kyari, who highlighted the age-long energy partnership between the two countries, stressing that Nigeria supplies 70 per cent of energy imports to the European nation.”

On its Twitter page, the NNPC further quoted Kyari as saying, “This year alone, we have sold over a billion-dollar worth of natural gas to Portugal.”

NNPC boss also noted that there were ample opportunities to grow the energy supply to Portugal.

He told participants at the forum that Nigeria had invested in critical infrastructure to ensure domestic gas availability and increase gas supply to the international market.

 

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