gas pipeline
A gas pipeline network
gas-pipeline
Nigeria to continue generating power from gas to help bridge the energy deficit.

In Nigeria, oil and gas firm Seven Energy has secured a $495 million (ZAR6 billion) loan from a consortium of national and international lenders to facilitate its plans of selling gas to the local market, Oil Review Africa reported.

The loan is being provided by First Bank, Ecobank, United Bank for Africa, Union Bank, FCMB, FBN Bank UK and Union Bank UK.

Investing in Nigerian gas market

The Nigerian oil and gas company has plans to sell gas to the domestic market for power generation through the purchasing of gas fields, the necessary infrastructure and gas pipelines.

Oil Review Africa  reported that Accugas Limited, wholly-owned subsidiary of Seven Energy, processes and distributes gas in Nigeria with $1 billion (ZAR12 billion) already invested in similar power projects in the southeast region of the country.

Unbundling of the electricity sector

Nigeria made the strategic decision to privatise the Power Holding Company of Nigeria in 2013 to help mitigate the frequent power outages which has hindered the development and growth of the economy from reaching its full potential.

With a population estimated at 171 million, Nigeria is currently only producing 5,00MW of power. Compared with South Africa, which has a population around 53 million and an estimated generation capacity around 41,995MW.

Part of the initial privatisation process was to sell ten gas-fired power plants under development by the Niger Delta Power Holding Company.

In earlier reports ESI Africa reported that these power plants were developed using government funds in line with the National Integrated Power Project (NIPP) a programme launched in 2004 to increase Nigeria’s low generation capacity and exploit the country’s large natural gas reserves.

Presidential elections

The 2015 Presidential elections in Nigeria elected Muhammadu Buhari as their new leader two licenses to decentralise the transmission arm of the energy sector came into effect.

The state-owned Transmission Company of Nigeria has been sub-divided into two divisions, namely – the Transmission Service Provider and the Independent System Operator. This has come about to promote a cooperative relationship between privately owned generation companies and the privately owned distribution companies to ensure the efficient transfer of power between these two sectors.

Cutting gas supply

In March, Nigeria had cut gas supply to the Volta River Authority due to Ghana’s debt of more than $120 million (ZAR1 billion).

According to Mining Review Africa, the gas cut was likely to cause a 600MW decline in power as gas is used to power the following thermal plants in Tema: Asogli Plant (220 MW), Cenit Plant (110 MW), Tema Thermal 1 Power Plant (110 MW) and Tema Thermal 2 Power Plant (50 MW).

Nigeria supplies Ghana gas via the West African Pipeline Company (WAPco) and according to World Bank, in 2013, WAGP delivered an estimated 32 million standard cubic feet per day (MMscf/d) of liquefied natural gas to Ghana.

 

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