Costs, policy, and operating environment among others need to be reviewed if the Federal Government must end gas flaring by December 2022, natural gas analyst, Kayode Oluwadare, has said.
According to Oluwadare, the federal government must address the cost differential between local and foreign retail prices, review its gas policy and ensure an enabling business environment for intending gas investors.
Breaking down some of the challenges, he said a metric million British thermal unit is sold for $55 in international markets while the same unit goes for as low as $3.77 in Nigeria. This, he said would continue to discourage potential investors from committing their funds to the initiative.
He said “A lot of gas producers would rather sell their gas to the international markets, rather than keep it for the domestic market. Even before the global energy crisis, it has always made more business sense for producers to sell gas to international markets (an estimated $55 per metric million British thermal units) and earn in US Dollars, as opposed to local/domestic markets which are priced in Naira (an estimated $3.77 per metric million British thermal units).”
He blamed this on the Nigerian Gas Master Plan (NGMP) that mandated gas companies to give waivers/subsidies to power generation plants.
“Another factor to consider is also the Nigerian Gas Master Plan (NGMP), which gives waivers/subsidies to power generation plants to get gas at the lowest possible price under the national gas pricing policy”, he claimed.
Kayode stated that major factors like Business environment, policies, cost, and market factors will have to be addressed for the Buhari administration to end gas flaring this year-end.
He said “If I am an investor and I want to trap gas from a production site, what are the terms for selling to the power plants to make profits? We already know how some power generation plants are unable to meet up with their financial obligations for gas supplies.”
On the issue of cost, he said some crude oil producers prefer to flare gas than process it because of the huge investment involved in trapping and processing it.
He said “There is also an issue of cost on the part of crude oil producers who would rather flare the gas than trap and process it, and the investors who will build gas processing plants, will they think it’s a worthwhile investment due to the fiscal regime that does not protect the gas producers?”
Nigerian Power Consumers Hit by Massive Overbilling, N105bn Raked by Discos
Nigerian power consumers are reeling from the impact of massive overbilling, with power distribution companies (Discos) collectively raking in N105 billion in nine months.
An analysis of the latest monthly data from January to September 2023 revealed that approximately 7.1 million unmetered electricity consumers across the nation fell victim to inflated bills.
The Nigerian Electricity Regulatory Commission (NERC), the federal agency overseeing the power sector, disclosed that the overbilling stemmed from the failure of Discos to adhere to the prescribed monthly energy caps for unmetered customers.
The overbilling issue has raised serious concerns about the financial burden on consumers and the credibility of the power distribution system.
A breakdown of the figures showed that various Discos were involved in overbilling activities, with significant discrepancies noted in the amounts charged against the estimated energy consumption.
For instance, Abuja Disco overbilled approximately 1.8 million customers by N17.9 billion, while Ikeja Disco charged 934,438 customers an excess of N20.9 billion during the review period.
The overbilling trend has prompted a swift response from NERC, which has vowed to take punitive measures against non-compliant Discos.
As part of its regulatory intervention, NERC announced plans to deduct N10.5 billion from the annual allowed revenues of the 11 Discos during the next tariff review.
Consumers, already grappling with the economic challenges, have expressed outrage over the overbilling saga.
Many have voiced concerns about the impact of excessive bills on their household budgets, calling for urgent measures to address the issue and restore transparency and fairness to electricity billing practices.
Nigeria’s Energy Sector Set for Growth as Akpo West Field Adds 14,000 Barrels per Day
Nigeria’s energy landscape is poised for significant expansion with the imminent commencement of production at the Akpo West field, a development expected to bolster the nation’s condensate output by 14,000 barrels per day (bpd).
The Akpo West field, owned by TotalEnergies and its partners, represents a pivotal advancement in Nigeria’s energy sector, promising to enhance the country’s position in the global oil market.
TotalEnergies, in collaboration with its partners, has unveiled plans for the Akpo West field, located on Petroleum Mining Lease (PML) 2, situated 135 kilometers off the Nigerian coast.
The field is strategically positioned to leverage existing infrastructure, minimizing costs and reducing greenhouse gas emissions.
Initial estimates indicate that the project’s carbon intensity will be below 5 kg CO2e/barrel of oil equivalent, contributing to TotalEnergies’ efforts to mitigate environmental impact.
The Akpo West development is anticipated to commence by mid-2024, marking a significant milestone in Nigeria’s energy sector.
With the addition of 14,000 bpd of condensate production, Nigeria’s total condensate output is poised to witness a notable surge.
Condensate, a highly sought-after light crude oil, commands premium prices in the global market, enhancing Nigeria’s revenue potential and economic resilience.
Furthermore, the Akpo West project underscores TotalEnergies’ commitment to sustainable energy development and innovation.
By harnessing existing infrastructure and optimizing operational efficiency, the project aims to maximize production while minimizing environmental footprint.
The launch of the Akpo West field represents a transformative moment for Nigeria’s energy sector, promising growth, innovation, and enhanced global competitiveness in the realm of oil and gas production.
Dangote Petroleum Refinery to Fuel 150,000 IPMAN Outlets Nationwide Following Successful Meeting
The Dangote Petroleum Refinery is poised to supply fuel to approximately 150,000 retail outlets affiliated with the Independent Petroleum Marketers Association of Nigeria (IPMAN).
The decision follows a successful meeting between the refinery’s management and top executives from IPMAN that agreed to bolster the nation’s energy supply chain.
Key industry players, including major oil marketers such as 11 Plc, Conoil Plc, Ardova Plc, MRS Oil Nigeria Plc, OVH Energy Marketing Limited, Total Nigeria Plc, and NNPC Retail, have already enrolled for product distribution from the state-of-the-art Dangote facility, which commenced the production of diesel and aviation fuel on January 12, 2024.
While regulatory assessments are underway before the final nod for fuel dispensing, IPMAN’s president expressed optimism about the positive impact this collaboration would have on the country.
“The meeting went well, so right now we are just expecting their reply in terms of the products that they are going to give us. They have agreed to dispense products to IPMAN members,” commented IPMAN’s president, reassuring that the Dangote Refinery, one of the largest in the world, is well-equipped to meet the nation’s consumption needs.
With the refinery’s promise to address fuel scarcity and bring products to market, IPMAN anticipates a transformative impact on Nigeria’s fuel distribution landscape, providing a potential solution to prevailing challenges in the sector.
Billionaire Watch4 weeks ago
MacKenzie Scott Sells Off $10.4 Billion Worth of Amazon Shares
Naira4 weeks ago
Dollar to Naira Black Market Exchange Rate January 26th, 2024
Forex3 weeks ago
Dollar to Naira Black Market Exchange Rate February 1st, 2024
Company News4 weeks ago
UAC Posts N12.7 Billion Profit Before Tax in 2023
Forex3 weeks ago
Dollar to Naira Black Market Exchange Rate February 2nd, 2024
Education4 weeks ago
WAEC: Over 8,000 Candidates Register for First Series of Computer Based-WASSCE in Nigeria
Banking Sector3 weeks ago
CBN Accuses Banks of Hoarding $5 Billion in Foreign Currencies
Forex4 weeks ago
Dollar to Naira Black Market Exchange Rate January 30th, 2024