Despite the worries over a record of 800 million standard cubic feet per day flared gas in Nigeria, six power plants remained idle for want of gas to fuel their operations, it was learnt Wednesday.
The Shell Petroleum Development Company (SPDC), Senior Commercial Adviser, Upstream Gas, Emmanuel Anyaeto made this known to journalists on the sideline of “Gas Aggregation Buyers’ Forum” which the Gas Aggregation Company of Nigeria (GACN) organized in Abuja.
According to him, the plants could not operate as there were no infrastructure to convey gas to their locations.
He added that the gas producers were also reluctant to supply them gas owing to their rising the debt profile which was almost hitting $500million.
He said Nigeria needed about two billion Standard Cubic Feet of gas to meet its needs for both domestic and power plants.
Anyaeto said that: “The reason is because we have about six power plants in this country that are standing idle that are not getting gas. The reason why they are not getting gas even though we are flaring 800million per day is that we don’t have enough pipelines to deliver the gas to the power plants.
“That begs the question why was the power plants built far away from where the gas is? The second thing is that the most of the producers are owed a lot of money. The producers are being owed close to $500million today.”
The power plants, according to him, are government owned, but since the governments were not paying, the producers now required a guarantee that they would be paid upon supply of gas.
This, condition, according to him, was what the governments were not meeting up with that culminated in the shortage of gas for the power plants.
He said that amount of investment that is needed to meet the two billion SCUF in Nigeria is about $6million dollars for gas, pipelines and other infrastructure.
According to him, producers were readily available for the gas business, but the challenge was whether customers are readily available to pay for the gas.
Also speaking with reporters, the GACN, Managing Director, Engr. Morgan Okwoche, noted that for Gas Purchase Agreement (GPAs) that were signed were not effective because there was no security for the electricity generation companies that need a bank up while the Nigerian Bulk Electricity Trading (NBET) was yet to come up with any security instrument.
He said that the N701billion intervention from the Central Bank of Nigeria had not been extended to the gas producers, stressing that GACN is in a position to certify any invoice dispute free.
He revealed that the GACN wrote to the NBET and Minister of Power to involve the company to help in disbursing the N701billion to avoid dispute future.
Okwoche said Nigerian gas market was still evolving and that the forum was convey to enhance the market.
He said that the essence of the forum was that there are so many areas of the gas business that are not clear from the buyer, seller, transporter and consumer sides.
Asked what was wrong with the market, he said that “the market is segmented, particularly the Domestic Supply Obligation, when it came into force has the power sector with a different price, gas based industry has a different price, and bulk distribution of gas has a different price.
“And also, the gas volume that should be in the market we are not getting the required volume from the suppliers and they have a chain of reasons: one of them is debt and two is non-compliance with the regulations.”