By NBF News

Operators to meet on gas challenges
By Elisha Bala-Gbogbo
March 16, 2010 01:52AM
The poor supply of power in the country, which is being compounded by gas supply shortages, makes it necessary for a dialogue among operators in the sector. To this end, the Nigerian National Petroleum Corporation (NNPC) plans to convene a stakeholders' forum for all the key players in the gas and power sector of the economy.

This comes on the heels of the recent challenges on the availability of gas encountered by the Power Holding Company of Nigeria (PHCN). According to data from the Power company, about 5,000 Mega Watts of power generation capacity lie idle because there is no gas to power the turbines.

“The NNPC had in the past few months adopted a number of measures aimed at finding a lasting solution to the gas-to-power challenge amongst which was the evacuation of condensate from Shell Petroleum Development Company facility by the Warri Refinery and Petrochemical Company, a subsidiary of the NNPC,” said Levi Ajuonuma, the corporation's Group General Manager, Group Public Affairs.

Sabotage, a major challenge
Violence in the oil-rich Niger Delta has been the major impediment to gas supply as pipelines pumping oil and gas have been targeted by militants. Due to the poor security situation, vandals and oil thieves have also taken advantage to sabotage the system.

Last week, Shell's Trans Forcados Pipeline (TFP) was re-commissioned following numerous incidents of sabotage.

“Recent sabotage incidents have resulted in damage to the Trans Forcados Pipeline and we have been unable to evacuate the condensate that is produced with the gas through this pipeline,” said Mutiu Sunmonu, Shell's Managing Director and Country Chair, Shell Companies in Nigeria.

“Accordingly, we resorted to temporary evacuation and storage at the Warri Refinery for which we are most grateful for the understanding and responsiveness of NNPC. In the absence of this, we would have had no alternative than to shut down the gas plants until the damaged liquids evacuation pipeline is re-commissioned.”

The pipeline is now ready to resume steady supply of gas to the domestic market.

Reason for forum
The NNPC explained that the success of a similar forum, Petroleum Downstream Stakeholders' Forum, held in January, encouraged it to organise this one scheduled to hold between for March 22 and 23, in Lagos.

Mr. Ajuonuma said the purpose of the forum is to “bring stakeholders in the gas and power industry together to brainstorm on the challenge facing the sector with a view to proffering practical solutions to it.”

He added that “though the measures introduced by the NNPC have begun to yield positive results, it has become very clear that if all the stakeholders in the sector do not work together the problem will still linger… considering the strategic position of power to the nation's economy, all hands must be on deck to resolve the national challenge.”

The Forum is expected to have in attendance both the regulators and players in the gas and power sector. They include the Nigerian Gas Company, Power Holding Company of Nigeria, Nigeria Electricity Regulations Commission, Nigeria Independent Power Project, and National Petroleum Investment Management services.

Others are Gas and Power Division of the NNPC, Exploration and Production Division of the NNPC, Shell, Exxon Mobil, Chevron, Agip, Total and Addax.