How NNPC Cripples Nigeria’s Gas To Electricity Aspirations.

Toyin Akinoso
David Ige went through his forty- something slide presentation so quickly you almost could hear him gasp for breath.
But while he kept his audience guessing about the details, he was anxious they got a hang of the big picture, namely that the Nigerian state was spending so much money on gas projects now, and we, the good people of the country, would soon begin to benefit.
All of us 150Million people would soon have electricity in abundance, as these long awaited, crucial gas infrastructure projects, were finally being executed.

Still, even as he urged delegates at the Nigerian Oil and Gas Conference in late February, to “bear with us, this is only the darkest hour before dawn”, I feared that much of what was playing out, in front of my very eyes, was a cynical conduct of affairs.

Dr Ige’s pedigree was not the issue. He is the Group Executive Director of NNPC in charge of Gas and Power. A former ranking executive at Shell, the Anglo Dutch giant, he was one of the “bright guys” from the International Oil Companies recruited -during the tenure of Funsho Kupolokun- to strengthen the capacity at the state hydrocarbon company. Mr Kupolokun ran the NNPC during the second term of Olusegun Obasanjo (2003-2007). That Ige has made it to the board of the corporation in that time frame, and is the only one of those “bright guys” to have done so, is instructive.

But he was standing on the podium as NNPC spokesperson on gas to power issues, trying to convince us that the company was tackling, headlong, the gas crisis it is largely responsible for bringing about. This, for me, was the problem.
NNPC has much more to account for in terms of why we are not getting gas in power stations that have been completed as far back as three years, but this situation was made worse by the fact that Ige, its point man, was more interested in not being quoted, in terms of the facts on the ground. He was keen on denying the Nigerian public anything that they could scrutinize.

Ige’s paper was one of the few headline papers at the conference that was not posted on the conference website, for reference by paying delegates. When I notified the conference organizers of my frustration in accessing Ige’s presentation on site they responded matter of factly: “David Ige instructed us not to post his paper”.
You couldn’t ameliorate this sort of thing with a tape recorder; the pdf presentation had costs of the crucial gas pipelines and the proposed timelines for completion, most of them more on display than voiced.

The highlights of that presentation, were the 31km pipeline to the power plant in Olorunsogo, which the presenter expected “should be completed by end of March 2012”, as well as “problems with gas plants at Utorogu and Ughelli”, in Delta State, that are currently being addressed.
He also declared that “Issues surrounding the two hundred and thirty eight million dollar ( $238MM), 104km Escravos-Lagos Pipeline System(ELPS) Phase 1A is close to resolution”. The work is a major reinforcement of the ELPS. A second project: The $382MM 96 inch ELPS Phase 2 contract aims to increase the capacity of the line.

This article will not concern itself with the other grand plans: all that talk of “three gas gathering and processing facilities, spread across three franchise areas in the Niger Delta, each having the capacity to process at least 300mmcf/d of wet gas in Phase 1 growing to about 1.5bcf/d over time in subsequent phases”. These are “feel good plans”, but what’s important is the reality on ground.

As I write this, on the last day of March, the short(31km) gas pipeline to Olorunsogo, in Ogun State, had still not be completed. The feelers I get from other impeccable sources is that this gas line will not be completed until August 2012.
This 335MW capacity plant was under construction before the government commenced the Niger Delta Independent Power Plants and had been completed even before Goodluck Jonathan took over as Acting President. Yet a “test” line was the only facility linking the plant to the ELPS, which is just 31kms away. On March 26, 2012, which is barely a week ago, Olorunsogo was delivering 40MW out of a total capacity of 304MW, essentially because it has never received enough gas to fully turn it on. In our “pure water economy”, a 264MW shortfall means a lot.
But this challenge of inability of getting gas across to power plants is all over the place and NNPC is at the centre of it. It is hard to know when the “Issues surrounding the $238MM, 104km Escravos-Lagos Pipeline System(ELPS) Phase 1A”, will be resolved. The opacity surrounding some of these projects rivals what obtains in the operations of the top secret service agencies in the world. Attempts to get the Nigerian Gas Company(NGC), the gas transportation arm of the NNPC, to speak about its challenges have proved fruitless. But these issues determine, far more than anything else, the availability of gas to all the power plants run by government.
Omotosho(Ondo State) and Sapele power plants, have a combined 704MW capacity, but were generating 65MW, or less than 10% of the capacity as of a week ago. Things are “better” at Geregu Plant in Kogi State. It is a cause for celebration that it is generating a whopping 120MW, (even if that is less than half) of its 414MW capacity.
The most efficient power plants in the country are the Agip run Okpai Plant in Delta State, supplying, today, 356MW out of a 480MW capacity and Shell operated Afam, in Rivers State, which generates 580MW from facility with 650MW capacity.

Gas supply challenges don’t always mean absence of optimally functioning gas pipeline supplying a power station, as the case of Olorunsogo suggests. There is for example, a fit and proper gas line to Geregu and yet the station is performing sub optimally. Gas shortages could simply mean that gas supplies from a gas processing plant- feeding a gas pipeline- drops, or a gas processing plant has issues. Which is why, when Ige says “problems with gas plants at Utorogu and Ughelli are being addressed”, the statement ought to be treated as a red flag. These plants supply significant volume of gas to the ELPS, which is the only gas transmission line in the country.
Problems with gas plants cannot be squarely blamed on the NNPC, but gas transportation is largely an NNPC responsibility and that is the purpose of this article.

NNPC’s attitude to management and maintenance of the ELPS, as well as its definition of urgency in construction and management of distribution lines from gas fields to power plants, even outside of the ELPS, constitute far greater challenge to power generation in the country, than does any other stakeholder.
When the Movement For Emancipation of the Niger Delta (MEND), announced itself by bombing the Warri South Leg of the ELPS in February 2006, plunging the entire nation into darkness, it took the Nigerian Gas Company (NGC ), the gas transport subsidiary of NNPC, two years to fix that leg. And the issues Dr Ige speaks of, which surround the completion of the Phase 1A of ELPS(the scope of which has never been clearly defined to the Nigerian public), can just go on and on. And we’d be here in 2014 and they’d still not have been addressed.

This lack of urgency is impacting the NIPP projects. In 2007, the Federal Government mandated Addax to supply gas to the Calabar Plant(one of the seven NIPP plants) from its Adanga Field in Oil Mining Lease(OML 123). Today the Calabar Plant is nearing completion (even though it has taken a while), but neither the gas processing plant, nor a half length of the pipeline (which was also mandated) is yet under construction. You’d think it’s the fault of Addax, but no. Addax is a contractor to NNPC in the Production Sharing Contract(PSC) under which operations in OML 123 are governed. The gas processing plant and pipeline project never happened because NNPC never committed to fund them. Now the Ministry of Power is in discussion with operators of Uquo field, to supply the gas!

There are other disturbing examples. Two years ago, the Akwa Ibom state government rushed to pay $33MM (Thirty Three Million dollars) to Seven Energy(a midstream, gas transporter)for a 67km gas pipeline from the then undeveloped Uquo field to Ikot Abasi, where the Ibom Power Plant is located. Because I knew that the same government had a contract with NGC to feed gas to the plant, I wondered, to a staff the power plant, why Akwa Ibom was wasting money all over the place. His response: “We want regular, clean source of gas supply”. Realising the implication of a civil servant thumbing down an agreement with a government company in favour of a private enterprise, I asked other knowledgeable sources about it (NGC won’t talk) and I was told that the gas that NGC agreed to supply Ibom Power was on “as is basis”. Translation: The NGC can’t guarantee regular supply. Which is why they (Ibom Power), had to look elsewhere. And these are not even half of the many examples!!
With these in mind, and knowing fully well that I, like most other people, would leave the conference hall to switch on generators at home, sitting down watching David Ige, the representative of NNPC in gas and power, rushing through his presentation, anxious that none of us gets his paper, to read, in private, I am thinking: What is there to say to him? Where, really, do you start?

.Akinoso is the editor/publisher of Africa Oil+Gas Journal