Nigerian Govt Declares Emergency Gas Supply Plan

Nigeria's Afam power plant
Nigeria's Afam power plant

Concerned by the recent shortfall and challenges in supply of gas to thermal power stations in the country which has subsequently led to significant drop in power generation and supply, Nigeria’s Federal Government has initiated some far reaching measures to address the existing challenges.

Part of the measures which were pronounced Wednesday in Abuja by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, included the declaration of a 12-month emergency plan on supply of gas to power plants across the country as well as the restructuring of the Gas Aggregation Company of Nigeria Limited (GACN) to meet up with increasing demand for gas to power plant.

Announcing the emergency gas supply plan, Alison-Madueke said in a statement from the Group General Manager, Public Affairs of Nigeria National Petroleum Corporation (NNPC), Dr. Levi Ajuonuma, that the new measures is expected to swiftly proffer solutions to existing gaps in the supply of gas as fuels in thermal power plants across the country.

Alison-Madueke, who also announced the appointment of Mr. Kunle Allen as the substantive Chief Executive Officer of GACN, stated that the 12-month emergency declaration on gas supply was aimed at correcting existing shortcomings in the nation’s gas to power aspirations.

Allen took over from Group General Manager, Gas of the NNPC, Dr. David Ige who had hitherto served as the Acting Managing Director of GACN.

She said: “To quickly and holistically address the misalignment, I am immediately deploying a 12-month ‘Domestic Gas Supply Emergency Plan.’ During this period, the Ministry of Petroleum Resources, together with the NNPC and the gas producing companies will deploy extraordinary measures to accelerate opportunities for quick wins in order to ameliorate the potential gap between gas demand and supply.”

The minister further explained in the statement: “In my capacity as the Honourable Minister of Petroleum Resources, and with the approval of Mr. President and on the strength of the extraordinary situations the country faces, a decision has been taken to strengthen the capacity, as well as the roles of the Gas Aggregation Company of Nigeria Limited (GACN), which is a DPR-regulated company of the Ministry of Petroleum Resources with responsibility for gas sourcing and allocation, as well as operator of the commercial framework of the Gas Master Plan.”

She noted that the decision to restructure the GACN was informed by expectations of increased demand for gas by power plants coming under the National Integrated Power Projects (NIPPS), adding that the accelerated and sustained delivery of quality energy services to Nigerians especially electricity remains a key aspect of President Goodluck Jonathan’s economic agenda.

“Even so, with the National Integrated Power Projects (NIPP) coming on stream, there are indications of increasing pressure to meet up with the quantity of gas required as fuel to power the plants and at the correct locations.

Accordingly, in addition to its traditional gas demand management role which includes processing requests from gas buyers, managing gas supply/demand allocation, as well as facilitating Gas Supply Aggregation Agreement (GSAA) negotiations, the GACN will henceforth be accountable for the following: identifying gas sources/suppliers and designing incentives for accelerated domestic gas delivery, driving the implementation of the findings of the recently constituted Emergency Gas Committee with emphasis on short and medium term gas supply, and on a sustained basis, ensuring integration as well as alignment between gas demand and supply to ensure robustness of longer term gas supply to power, and, provide implicit data to enable the DPR to be more proactive in compelling suppliers to meet domestic gas supply obligations,” Alison-Madueke stated.

In announcing the change of guard at GACN, the minister said: “Finally, the President of the Federal Republic of Nigeria, Commander in Chief of the Armed Forces, Dr. Goodluck Ebele Jonathan GCFR, has approved the appointment of Engr. Kunle Allen as the substantive Chief Executive Officer for the Gas Aggregation Company of Nigeria (GACN). He will, within this period of emergency period report directly to the Honourable Minister of Petroleum Resources and will be accountable for the delivery of the roles stated above.”

Accordingly to her: “Delivery of gas to guarantee sufficient, uninterrupted supply to existing, as well as new thermal generating plants has been a special focus area of mine and the Ministry of Petroleum Resources.

Up to recent times, gas supply to power plants outstripped demand to the extent that significant volumes of available gas remained unutilised on a daily basis. However a close analysis of the supply chain has revealed that over the last 10 years or so, there has been significant misalignment between power projects and gas supply sources.”