Inadequate Gas Supply Threatens Nigeria’s $5.75 Billion Power Project

Nigeria's Afam power plant

Plans by the federal government to add an additional 10,000MW of electricity to the national grid by 2014 through the implementation of the National Integrated Power Projects (NIPPs) might be fruitless if nothing is done now to aggressively tackle gas supply constraints bedevilling the project.

Although the managing director of the Niger Delta Power Holding Company (NDPHC), owners of the NIPPs, Mr. James Olotu, has said that the project, which has gulped about $5.75 billion since inception, was on course, assuring of its delivery by first quarter of 2014, findings have shown that the programme might be completed without having any significant contribution to power supply due to gas constraints.

Olotu said the programme could achieve 4,770MW by December this year and 10,000MW of power by 2014 if there is adequate gas supply.

However, while some sites have peculiar challenges that have prevented them from reaching first fire on schedule, most of the plants with completed units cannot run because of the lack of gas supply.

For instance, Olorunshogo power plant which has an installed capacity of 676MW already has 451MW commissioned and available, but the plant occasionally runs on one or two units of 112.2MW each, subject to availability of gas.

Same fate has befallen the Sapele plant, where 225MW has been commissioned out of the total installed capacity of 451MW, but occasionally operates only one unit of 112.5MW due to the same reason.

For the Calabar power plant, a 563MW facility, cold commissioning has been delayed because some of its vital components have been taken to operate the Sapele plant. It was observed that although two turbines would be ready for commissioning by August and October 2012, there would be no available gas for the plant to run, as the earliest gas delivery from Addax to the plant is expected by 2014, while an alternative gas arrangement at high cost from Seven Energy is, however, expected later in the year.

It was further observed that Omotosho power plant, a 451MW facility, would reach first fire this month, five months ahead of schedule, with all its four turbines expected to become operational by September this year, but there is yet no approved date for tie-in to existing gas line being arranged with the Nigeria Gas Company.

On the contrary, while Alaoji a 961MW power plant, where most of its units would become operational between March and August 2012, has no gas supply challenge, evacuation capacity is only limited to 150MW.