Exclusive interview with Isaac Gbenga Oluwadiya, Gas to Power Advisor, Adam Smith International, and moderator of the panel discussion on “Monetisation of Gas Reserves for Power Projects” at the upcoming WAPIC in November.
Please tell us more about your position at Adam Smith International.
I am a Gas to Power Advisor for the Nigeria Infrastructure Advisory Facility (NIAF), an intervention of UK’s Department for International Development (DFID), being implemented by Adam Smith International. I have primary responsibility of securing adequate gas supply to power plants in Nigeria.
Any specific projects that you are working on that are particularly exciting and that you can share some updates on?
Support to Nigerian Power Generation Companies (Gencos):
- Facilitation of engagements between Gencos and their counterparties to enable activation of Gas Sale and Aggregation Agreements, Gas Transportation Agreements and other industry agreements to kick-start commercial gas to power transactions.
- Identification and creation of solution spaces to obstacles preventing commencement of gas to power transactions under the commercial framework of the Nigerian Gas Master Plan (NGMP), and by extension the Transitional Electricity Market (TEM) in Nigeria.
- Developing strategies to unlock stranded Nigerian natural gas resources and monitor commissioning of new gas development projects.
Support to the Federal Ministry of Power:
- Monitored and reported on natural gas production, capacity expansions, and supply interruptions.
- Support to the Central Bank of Nigeria (CBN) on:
- Analysed and appraised gas supply capacity enhancement as a result of the Nigeria Electricity Market Stabilization (NEMS) Facility.
- Supporting timely activation of gas supply transaction agreements between gas supplier, gas transporter and power generation companies (resolution of outstanding issues preventing satisfaction of conditions precedent to activation of affected gas agreements).
- Provision of adhoc advice on natural gas issues to the Special Assistant on Energy to the CBN Governor.
- Conducts periodical appraisal on implementation of the Nigerian Gas Master Plan (NGMP).
How will gas be a game changer in West Africa’s energy management?
- Encourage deployment of energy efficient gas fired combined circle power plants.
- Increase in regional energy trading platform (LNG or Piped Gas i.e. WAGP; Power trading).
- Multiplier effect on regional economic (GDP) growth.
- Increased gas development (supply) will reduce dependence on liquid fuels for power generation.
- Reduction in carbon emission for power generation compared to generation from other fossil fuels.
What are the main challenges in the gas utility industry?
- Inadequate funding of gas development and infrastructure projects.
- Non alignment of regional gas and power regulatory framework.
- Emphasis on political over economic considerations in allocation of gas resources (e.g. Imposition of National Domestic Gas Supply Obligations on gas producers by the Nigerian government).
- Sanctity of gas transaction contracts.
- Security of gas development and supply infrastructure – vandalism and sabotage of gas to power infrastructure for criminal, economic and political reasons.
- Lack of adequate payment security arrangement that would guarantee repatriation of revenue.
- Non- alignment on gas development and offtake projects delivery schedule – stranded gas assets.
- Lack of regional gas pipeline network code that would allow open access to stakeholders on existing infrastructure.
What surprises you about this sector?
The slow pace of sectorial development despite its potential benefits to the regional economy.
You are chairing a session at WAPIC on “Monetisation of Gas Reserves for Power Projects” – what are you most looking forward to in this session?
- Identification of realistic short, medium and long term strategies to increase monetization of regional gas reserves for power projects.
- Identification of obstacles to funding, and devise solutions to unlock funds for gas development and transportation projects.
- Review the economic viability of non-conventional means of transporting gas from fields to offtake locations (CNG and Mini-LNG solutions).
- Identification and allocation of roles of regional governments and the private sectors in monetization of gas to power.
What will be your message at WAPIC?
Gas to power stakeholders should undertake a critical review of the regional the value chain and resolve to strengthen the weak links in the chain.