News Power

NNPC, TotalEnergies to Invest $550m on Gas Infrastructure to Boost Domestic, Export Supplies

The Nigerian National Petroleum Company Limited (NNPC) and its partner, TotalEnergies, have agreed to invest $550 million for the development of a gas processing facility in southern Rivers State to boost exports and domestic supplies of gas.

An official at NNPC who is privy to the agreement disclosed this to Reuters yesterday, saying the investment would include a gas processing plant and a pipeline.

TotalEnergies declined to comment while the NNPC source said an announcement would be made this week, according to the international news agency.

The gas processing facility would be built on the Ubeta onshore gas field, jointly owned by TotalEnergies and NNPC and would supply gas to the Nigeria Liquefied Natural Gas (NLNG) plant, the report stated.

The NLNG is a consortium between NNPC, Shell, TotalEnergies and Italy’s Eni (ENI).

When completed, the plant would generate 350 million standard cubic feet per day of gas (mmscf/d) and 10,000 barrels per day of associated liquids, the source stated.

Nigeria, which holds Africa’s largest natural gas reserves of over 209 trillion cubic feet (tcf) flares – or burns off gas from its oil fields because it lacks processing infrastructure and faces capital constraints.

The latest investment could mean President Bola Tinubu’s bid to attract investment into Nigeria’s energy sector is beginning to succeed, analysts said.

“The government will hope this offers confidence not only in the quality of the Nigerian resource base, but also in the government’s pledge to improve ease of doing business,” Reuters quoted the Director, sub-Saharan Africa at Political Risk Consultancy Horizon Engage, Clementine Wallop, to have said.

Energy analysts hold the view that Nigeria has failed to increase its exports to the European Union after the bloc sought alternative supplies to make up for lost Russian imports because of the Ukraine War.

Locally, Nigeria is struggling to feed its gas power plants that generate most of its grid electricity, the report added.

News Power

FG re-engineers Nigeria’s oil bidding process, focuses on production bonus

The Federal Government has re-engineered Nigeria’s oil bidding process with emphasis on production bonuses, targeted at enabling investors to channel their scarce resources into immediate development and early production.

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In the past, emphasis was placed on the high signature bonus, a development that discouraged local and foreign investors from investing while also scuttling early development and commencement of oil and gas production as well as the unlocking of many multiplier effects.

But under the new arrangement, the industry regulator, Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has removed entry barriers, including the slashing of the signature bonus – a single, non-recoverable lump sum payment made upfront by oil companies to the government for the rights to develop an oil block commercially after successfully winning in the license bid round – to only $10 million for deepwater assets and $7 million for shallow water and onshore assets.

The strategy aims at growing oil and gas production, enhancing Nigerian Content Development, attracting Foreign Direct Investment, contributing to long-term global energy sufficiency, expanding opportunities for gas utilization, and creating employment opportunities while adding value to government and investors.

According to experts, the development illustrates the sensitivity of the Commission to developments around the world, especially the sustainable rise in Capital Expenditure, CAPEX, going into funding renewables in the spirit of the global energy transition.

They said it further showed its accurate comprehension of trends in other oil and gas climes; where the governments have drastically reduced signature bonus to attract investors and financiers into their industries.

Available data indicate that in the Middle East and North Africa, signature bonus currently stands at about $10 million while Thailand and Indonesia have about $3 million (minimum) and N1.5 million, respectively, meaning that Nigeria’s oil and gas landscape is now in alignment with the rest of the world.

Besides, the current bidding also opens a window for investors to bid for the 2022 blocks based on the current incentivized terms instead of paying the previous $50 million.

It was gathered that Nigeria will be able to complete many projects, leading to the creation of many multiplier effects, including production capacity, employment, contracts, community development, local content and gas-to-power, thus providing more energy to households and businesses nationwide.

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Also, it was further gathered that Nigeria will be able to generate substantial revenue in the form of production bonus when investors begin their oil and gas production.

Commenting on the development, the Executive Chairman, African Energy Chamber, NJ Ayuk, said: “Nigeria has established a robust framework that is set to attract foreign exploration companies with modernised fiscals that are competitive for deepwater exploration. We the AEC believe the most lucrative balancing point between creating a welcoming environment for international companies and achieving Nigeria’s own national goals is important.

“Key to this bidding round will be the role of independents and indigenous players when it comes to exploration. The bidding round also paves the way for gas monetisation that will bring amazing benefits to Nigeria and also international markets.”

Similarly, the Executive Director, Emmanuel Egbogah Foundation for Petroleum, Prof. Wumi Iledare, said: “A high signature bonus is regressive. It does make a petroleum province with a high signature bonus less attractive.”

On his part, the National President, Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “Investors need a conducive environment to put their money. Once the right environment exists, foreign capital will begin to flow in.”

However, speaking at the recent pre-bidding conference in Lagos, the Commission Executive, NUPRC, Engr. Gbenga Komolafe, said: “A review of Welligence Energy Analytics reports on Licensing rounds across the globe including Brazil, Guyana, Angola, Middle East, North Africa, SouthEast Asia, etc, revealed that the era of huge front-loaded signature bonuses is over.

“Accordingly, Nigeria under President Bola Ahmed Tinubu, as the Minster of Petroleum Resources has proactively and intuitively vacated barrier to entry for investment in exploration blocks being offered, in both the 2022 deep offshore bid round and the 2024 licensing round, in line with international best practices.”

He said: “President Bola Ahmed Tinubu and Minister of Petroleum Resources, Nigeria have embarked on a transformative agenda that aligns with the most stringent global standards and commitments. The recent Presidential Executive Orders issued in March this year, aimed at improving the efficiency and attractiveness of Nigeria’s oil and gas sector, were generously targeted to incentivize oil and gas development, introduced measures to balance the implementation of Nigerian Oil and Gas Industry Content Development Act, 2010 to ensure that oil and gas development is not hindered by local content bottlenecks. The Executive Orders also include directives on the reduction of contracting costs and timelines to enhance the global competitiveness of our oil and gas industry and achieve a higher rate of return on oil and gas investments.

“Nigeria is endowed with abundance of Crude Oil and Condensate Reserves and of Natural Gas Reserves representing above 30% and 33% respectively of the entire Oil and Gas reserves in Africa aside abundant mix of other renewable energy resources. In a bid to exploit and optimize these abundant Hydrocarbon resources, Section 7(t) of the Petroleum Industry Act (PIA) empowers the NUPRC, the Industry Regulator to conduct bid rounds for the award of PPLs and PMLs under the Act and applicable Regulations.

“It is on this premise that the Federal Government of Nigeria through the NUPRC recently announced the commencement of the 2024 Licensing Round both in-country and outside the shores of the nation. It would be recalled that we commenced the announcement at the maiden edition of the NEITI Dialogue Session, 2024, where the bid processes were thoroughly interrogated by civil society and the media.

“This was subsequently followed by the announcement of the commencement of the bid round at the 2024 OTC in Houston, the roadshow in Miami organized by Zeste Advisory, African Energies Summit in London organized by Frontier Network and Invest in Africa Energy Summit in Paris organized by Energy Capital Power. The Commission aims to project and attract robust local and foreign investors who will be participating in the bid exercise.”

He also said: “The NUPRC on behalf of the Federal Republic of Nigeria is committed to conducting the licensing round in a fair, competitive and transparent manner and ensuring a level playing field for both indigenous and international investors. Our approach is underpinned by the robust legal framework of the Petroleum Industry Act 2021(PIA), which ensures compliance with best practices to boost investors’ confidence.

News Power

President Tinubu to commission 3 main gas infrastructure projects by NNPC, others

President Bola Tinubu is set to inaugurate three vital gas infrastructure projects carried out by the Nigerian National Petroleum Company Limited (NNPCL) and its partners.

This is contained in a statement by the President’s spokesperson, Ajuri Ngelale, on Friday in Abuja.

According to the statement, the projects will enhance the federal government’s initiative to increase the value derived from the nation’s gas assets and eliminate gas flaring.

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Ngelale pointed out that the delivery of the projects was expedited from the start of the administration, aligning with the overarching goal of enhancing domestic gas supply as a vital catalyst for economic prosperity.

“In line with his commitment to significantly leverage gas to grow the economy, President Bola Tinubu will commission three critical gas infrastructure projects being undertaken by the Nigerian National Petroleum Company Limited (NNPCL) and partners.
“The projects support the federal government’s effort to grow value from the nation’s gas assets while eliminating gas flaring.
“The delivery of the projects was accelerated from the inception of the administration in keeping with the overall objective of deepening domestic gas supply as a critical enabler for economic prosperity,” Ngelale noted.
The Projects to be Commissioned by the President
The projects lined up for commissioning include:

1. AHL Gas Processing Plant 2 (GPP – 2) – 200mmscf/dd:
This project is an expansion to the Kwale Gas Processing Plant (GPP – 1), which currently supplies about 130MMscf/d of gas to the domestic market. The processing plant is designed to process 200MMscf/d of rich gas and deliver lean gas through the OB3 Gas Pipeline.
This additional gas supply will support further rapid industrialization of Nigeria. The plant will also produce about 160,000 MTPA of Propane and 100,000 MTPA of Butane, which will reduce the dependency on LPG Imports.
The AHL Gas Plant is being developed by AHL Limited, an incorporated Joint Venture owned by NNPC Limited and SEEPCO.

2. ANOH Gas Processing Plant (AGPC) – 300MMscf/d:
The ANOH gas plant is an integrated 300MMscf/d capacity gas processing plant designed to process non-associated gas from the Assa North-Ohaji South field in Imo State.
The plant will produce dry gas, condensate, and LPG. The gas from ANOH gas plant will significantly increase the domestic gas supply, leading to increased power generation and accelerated industrialization.
The ANOH Gas Plant is being developed by ANOH Gas Processing Company, an incorporated Joint Venture owned by NNPC Limited and Seplat Energy Plc on a 50-50 basis.

3. ANOH-OB3 CTMS Gas Pipeline Project:
The project involves the engineering, procurement, and construction of 36”x23.3km ANOH-OB3 Project.
The Transmission Gas Pipeline will evacuate dry gas from the Assa North-Ohaji South (ANOH) primary treatment facility (PTF) to OB3 Custody Transfer Metering Station (CTMS) for delivery into the OB3 pipeline system.
About 600MMscf/d is estimated to be available from two separate 2 x 300MMscf/d capacity gas processing production trains from AGPC & SPDC JV.

Furthermore, Ngelale further stated that the projects will boost gas supply to the domestic market by about 500 million standard cubic feet per day, fostering a more favorable investment environment and cumulatively promoting balanced economic growth following their commissioning.

What you should know
Earlier in February, President Bola Tinubu signed new executive orders aimed at enhancing the investment environment and establishing Nigeria as the top choice for investments in the oil and gas industry across Africa.

The president issued this policy directive in Abuja’s extensive engagements with major stakeholders in the sector.
The directives entail the provision of financial incentives for the development of non-associated gas, midstream operations, and deepwater projects.
In addition, the initiative focused on optimizing the contracting process to decrease the cycle time to six months.

News Power

NNPCL says there is sufficient petrol stock for 30 days, warns against panic buying

The Nigerian National Petroleum Company Limited (NNPCL) has warned the public against panic buying of the premium motor spirit (PMS), also known as petrol, stating that it has about 1.5 billion litres of the product which would be sufficient for 30 days’ supply.

This was disclosed in a statement by the company, noting that queues across fuel stations in the country have reduced significantly over the measures it has taken to address supply scarcity.

It stated, “
As the nationwide supply and distribution of Premium Motor Spirit (PMS), also known as petrol, continue to improve, the Nigerian National Petroleum Company (NNPC) Limited has once again called on motorists to shun panic buying of the product.”

“The Company wishes to state that at the moment, it has over 1.5 billion litres stock of PMS, which is equivalent to over 30 days sufficiency.”

The company further noted that it is collaborating with relevant agencies, the Nigerian Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA), labour unions and security agents to address uncompetitive practices and hoarding by marketers and distributors.

“It stated,
“The NNPC Ltd. is also collaborating with relevant downstream agencies, such as the Nigeran Midstream & Downstream Petroleum Regulatory Authority (NMDPRA), labour unions in the sector and security operatives, to address hoarding and other unwholesome practices.”

Backstory
In the past week, Nigerians have had to queue for petrol due to shortages in the supply of the product, resulting in a significant increase in its pump price across the country.

Although the NNPCL stated that the scarcity would be over in three days, blaming the shortages on logistical and distribution issues. However, the scarcity has lingered on and resulted in a significant increase in transportation costs for members of the public.

Recommended reading: Nigeria to get 20000bdp oil from OML 85 oil platform – NNPC
What you should know
An investigation by Nairametrics revealed that petrol sold for over N700 per litre in Abuja, Lagos and Ogun states. In some places, the price of petrol was as high as N1500 per litre in the “black market” last week.

Furthermore, Nairametrics also reported significant increases in transportation costs following the scarcity and resultant hike in petrol prices. In some cases, the increase in transport fares was as high as 100% and on average there was a 50% increase in transport costs following the scarcity of petrol in Lagos.

Also, the scarcity in transport costs also brought to the fore the discussion on resumption in payment of subsidy for petrol after the removal in 2023. The CEO of Rain Oil, Mr Gabriel Ogbechie, had earlier stated that the Federal Government was spending around N600 billion monthly on fuel subsidy, mainly due to the significant depreciation of the naira.

News Power

NNPCL, NOSL commence oil production at OML 13, target 40,000bpd

The Nigerian National Petroleum Company Exploration and Production Limited (NNPC E&P Ltd.) and its partner, Natural Oilfield Services Ltd. (NOSL), have announced the commencement of crude oil production at Oil Mining Lease (OML) 13 in Akwa Ibom State.

The NNPCL disclosed this in a press statement signed by its Communications Officer, Olufemi Soneye, where it stated that oil production began in the location on the 6th of May 2024 with 6,000 barrels daily.

The company further said that daily oil production in OML 13 is expected to rise to 40,000 barrels per day by the 27th of May 2024.

It stated, “NNPC Exploration and Production Limited (NNPC E&P Ltd.), NNPC Ltd.’s flagship upstream subsidiary, and Natural Oilfield Services Ltd. (NOSL), a subsidiary of Sterling Oil Exploration & Energy Production Company Ltd. (SEEPCO), announce the successful commencement of oil production at Oil Mining Lease (OML) 13 in Akwa Ibom State, Nigeria.”

“The production, which commenced on the 6th of May 2024, with 6,000 barrels of oil, is expected to be ramped up to 40,000 barrels per day by May 27th, 2024.”

Increase in oil production
The company explained that the commencement of crude oil production in OML 13 signifies an intent to increase the volume of oil production in the country to meet local energy needs and propel economic growth.

The statement further read, “The achievement does not only signify the culmination of rigorous planning and execution by the teams involved but also represents a new era of economic empowerment and development opportunities for the host communities.”

“Furthermore, for Nigeria, the first oil from OML 13 holds some significance as it contributes to the country’s efforts to increase its oil production capacity, which is crucial for meeting domestic energy needs and driving economic growth.”

Regarding environmental and sustainability considerations, the NNPCL and its partner promised that its operations would be done in a safe and environmentally responsible manner beneficial to its host community.

What you should know
Production at the OML 13 conventional oil development project was earlier stated to commence in 2024, with peak output anticipated in 2029.

Under the current economic projections, it is expected that production will persist until the field reaches its economic limit in 2063, according to Global data.

Nigeria is desperate to increase oil production to meet local revenue expectations and generate needed foreign exchange (FX). In the first quarter of 2024, Nigeria barely met its OPEC production quota of 1.5 million bpd.

Manufacturing Power

Attention on Nigeria, Africa as nine European refineries shutdown

• Importation of crude oil remains key barrier amidst domestic refining
The global petroleum products market is changing faster than expected as more refineries are shutting down on the backdrop of the push for global warming and energy transition.

At least, nine refineries with the latest being Eni’s Livorno refinery have either shut down or converted into other products at a time when Nigeria and other African countries are building more refineries.

If the trend persists, Africa which had once relied on Europe for petroleum products may now survive by itself amidst tightening geopolitical tensions and rising energy crisis, which may worsen the existing crisis for Africa’s economy.

Eni, had on Monday said its refinery in Livorno would be converted into a biofuels-making facility.

This marks the ninth European refinery closure since 2020, bringing the total lost crude processing capacity to over 1 million barrels per day, including the upcoming closures of Grangemouth and Wesseling in 2025.

Eni plans to convert an 88,400 barrel per day oil refinery into a bioplant, following a similar transformation at Gela. This announcement comes as the second European refinery closure within a week, following the 147,000 barrels per day Wesseling closure in western Germany.

As these assets are closing down as the pressure for carbon footprint and ESG intensifies, the Dangote Refinery in Nigeria is starting. The refinery alone alongside the Nigerian 445,000 refineries is making efforts to come onstream. Along with the 650,000 Dangote refinery, are enough to make up for the loss of over one million barrels per capacity that would be taken off the market.

The Minister of State for Petroleum Resources (oil), Heineken Lokpobiri, had earlier said that about five new licenses were granted for refinery establishment.

While licences are only the first attempt, approximately 18 years ago, private investors sought refinery licenses under former President Olusegun Obasanjo, and during President Muhammed Buhari’s tenure, additional licenses were offered.

These licenses, totalling around 62, could potentially elevate the country’s refining capacity on paper to over 2.3 million barrels per day. This exceeds the nation’s daily crude oil production by one million barrels, raising concerns about the viability of upcoming refineries unless there is a substantial increase in crude oil production.

Presently, the existing refining capacity comprises the Dangote Refinery with a capacity of 650,000 bpd, BUA Refinery with 200,000 bpd, and NNPCL with a combined capacity of 445,000 bpd.

Operational refineries such as OPAC, Walter Smith, Aradel, and Edo, collectively have a capacity of 27,000 barrels per day. Considering these, the operational or soon-to-commence refineries amount to about 1.322 million barrels per day. The remaining refinery licenses, mainly modular refineries with unknown status, contribute close to one million barrels per day in capacity.

Refineries with active Licences to the Establish include BUA Refinery and Petrochemicals, Ogini Refinery Limited, Excel Exploration & Production, Lowrie Refinery Limited, NPDC/ND WESTERN OML 34 JV, Eghudu Refinery, and Kingdom Global Trading Petroleum and Gas Nig.

Refineries with active Approvals to Construct/Relocate comprise Dangote Oil Refinery Company, OPAC Refineries, Waltersmith Refining & Petrochemical Company, Niger Delta Petroleum Resources, Edo Petrochemical Refinery, Etopo Energy Plc, Resource Petroleum & Petrochemicals International Incorporated, Duport Midstream, and Conodit Refinery Nigeria.

Others include Lowrie Refinery, Excel Refinery, Gasoline Associates International, Frao Oil Nigeria, Alexis Refinery, Allegiance Energy and Power, Atlantic International Refineries and Petrochemical, Amakpe International Refinery Inc, Gazingstock Petroleum Company, Azikel Petroleum, and Clairgold Oil & Gas Engineering.

The President of the Crude Oil Refinery Owners Association (CORAN), Momoh Oyarekhua, noted that currently, Nigeria has four operational modular refineries: OPAC refinery, WalterSmith refinery, Aradel refinery, and Edo refinery, with a combined capacity of 27,000 barrels per day.

Although there are indications that the country may through these refineries be able to meet demand for petroleum products, the existing refineries including Dangote are relying on imported crude oil.

Some stakeholders have also expressed fear that the Nigerian National Petroleum Company Limited may struggle to find 445,000 barrels of crude oil if its refineries come back on stream.

The African Refiners and Distributor Association noted that distribution infrastructure within the African corridor may become a critical challenge even as the continent, with a rapidly growing population, is attempting to refine crude and process gas.

The association has also expressed concerns over the quality of petroleum products coming from across refineries in the continent, stressing that the continent requires over $14 billion to upgrade refineries for much more cleaner and efficient petroleum products.

There is an ongoing collaboration between ARDA and the African Union (AU) on the adoption of harmonised AFRI Clean Fuel Specifications across Africa. These cleaner fuel specs recommend the adoption of AFRI 5 (50 ppm sulphur for gasoline and diesel) by 2025, and the adoption of AFRI 6 specs (10 ppm for the same products) by 2030.

The objective is to stop the importation of fuels that do not meet these AFRI specs into Africa by 2021 and give existing refineries until 2025 to upgrade their facilities to produce cleaner specs.

The ECOWAS Council of Ministers of Hydrocarbons had, in February 2020 recommended product imports to meet AFRI 5 specs by 2021, and for ECOWAS refineries to meet AFRI 5 specs by 2025.

Power

Seplat Energy receives CSR award

Seplat Energy Plc has been honoured with the Social Impact and Sustainability Awards (SISA) Corporate Social Responsibility (CSR) award for empowerment. Member of Trustees at Sustainability Professionals Institute of Nigeria and President of the International Network for Corporate Social Responsibility, Eustace Onuegbu, highlighted the significance of these awards in recognizing transformative efforts in Nigerian society.

The award specifically acknowledges organizations that have embraced globally recognized sustainability standards such as ISO 37101 Management Standards on Sustainable Development, ISO 26000 Social Responsibility, ISO 14001 Environmental Management, ISO 9001 Quality Management, ISO 20400 Sustainable Supply Chain Management, ISO 45001 Occupational Health and Safety Management Standards, among others.

The recognition extends to adherence to best reporting standards like GRI and IIRC Standards, as well as initiatives aligned with the UN’s 17 Sustainable Development Goals (SDGs) and philanthropic contributions.

Seplat Energy’s commitment to educational advancement and stakeholder engagement received a commendation from the award organizers. The company’s notable educational CSR initiatives, including the Seplat Pearl’s Quiz, National Undergraduate Scholarship, SEPLAT Teachers Empowerment Programme (STEP), and Seplat Innovators programme, were highlighted.

Director of External Affairs and Social Performance, Chioma Afe, expressed gratitude for the recognition, emphasizing the company’s dedication to global best practices in social development programs, particularly in host communities.

Afe stressed that Seplat’s educational CSR initiatives align with the company’s seven Principles of Corporate Strategy, emphasizing accountability, transparency, ethical behavior, respect for stakeholders’ interests, adherence to the rule of law, compliance with international norms, and respect for human rights.

Power

Fresh oil production hiccups may distort market stability despite $490b investment

Although about $490 billion is being invested this year to boost crude oil production and plug the supply gap, there are indications that supply shortfall may persist.

The development, which kept the oil price at about $84 per barrel, yesterday, is expected to increase the oil price to $100 per barrel, thereby compounding the current global energy crisis with the inflationary implications.

Coming at a time when Nigeria’s oil production is shrinking following 400, 000 barrels daily loss to theft, the prevailing situation may further worsen the pump prices of petroleum products, escalate the foreign exchange crisis and expand fiscal deficit.

Wood Mackenzie analysts, in a new report on upstream investment, have noted that the oil and gas industry is currently in the third year of an upcycle, with investment in production at $490 billion.

The funding, though significantly higher than the $370 billion low recorded in 2020, upstream analysts at Wood Mackenzie, Fraser McKay and Ian Thom, said much would still be needed to balance supply in the market.

The analysts were specifically worried about the lack of a spare production capacity, which could be viewed as a side effect of newly-found discipline with spending and focus on efficiency while adjusting to a world in transition.

“We expect companies to go for margin rather than market share; and upstream supply chain capacity to creep rather than leap, which has been the traditional response in an upcycle,” McKay and Thom said.

According to them, restraint could lead to a tighter supply chain than the industry has been used to. In Nigeria, the development is worsened by continuous divestment in the industry. Although the country conducted a bid round last year, most international companies are holding back their capital as Nigeria has repeatedly failed to meet its three million barrels daily target.

Amidst the stranded sale of ExxonMobil assets to Seplat, international oil companies have reported divesting assets worth over N20.8 trillion. For instance, Shell plans to divest about $2.3 billion in assets, Eni’s asset divestment is around $5 billion and ExxonMobil would offload $15 billion in assets.

Rystad Energy had initially estimated that Total and ConocoPhillips would divest assets close to $27.5 billion. With dwindling crude oil reserves, now hovering around 37 billion barrels instead of the projected 40 billion barrels, Nigeria’s spending on exploration has been in inland basins in northern states.

Earlier, stakeholders disclosed that Nigeria may see the coming onstream of over $32.5 billion worth of oil and gas projects as the Nigeria National Petroleum Company Limited and International Oil Companies operating in the country yesterday show readiness to sign final investment decisions (FIDs) on some projects.

The development came on the backdrop of the payment of $3.8 billion to oil operators in the country to clear all outstanding Joint Venture (JV) cash-call debts, which may see Shell alone decide on $19 billion worth of projects in the next 10 years, Managing Director of Shell, Osagie Okunbor said.

News Power

Nigeria needs reliable energy for industrialisation – Tinubu

President Bola Tinubu has said that Nigeria’s plans to become industrialised, create jobs and achieve economic growth cannot be achieved if reliable energy is not generated, transmitted and distributed.

Tinubu said this at the groundbreaking ceremony of the Gwagwalada Independent Power Plant (GIPP) Project held in Abuja on Friday.

He reiterated that he had promised to prioritize energy availability and stability while using available energy resources to increase power generation beyond the current capacity and strengthen the integrity of the transmission infrastructure while distribution bottlenecks are removed.

“We cannot be productive without energy efficiency; To accelerate our economic growth, we must remove every obstacle on our way to progress,” he said.

In his address, Mele Kyari, GCEO, NNPCL said Nigeria has abundant gas resource which NNPCL as a commercial enterprise is leveraging to monetize the available resources by expanding access to energy to support economic growth, energy access, industrialization and job creation.

He described the project as a giant step towards achieving the NNPC’s goal of adding 5GW to the national power generation by 2024

He said currently NNPC and partners are delivering about 800MW to the national grid from Afam Vl and Okpai Phase thermal power plants with combined installed capacity of 1,100MW, adding that the Okpai Phase 2 project that will add up to 320MW of power to the national grid and progressing with other power plant projects across the country including those along the AKK pipeline route has been completed.

He added that the Gwagwalada IPP is among the NNPC flagship power projects along the AKK corridor which is part of the 3,600MW cumulative power capacity including Kaduna IPP (900MW) and Kano IPP (1,350MW).

The Gwagwalada IPP is among the NNPC flagship power projects along the AKK corridor. will be delivered in collaboration with General Electric as the as the Original Equipment Manufacturer (OEM) and China Machinery and Engineering Corporation (CMEC) as the Engineering, Procurement and Construction (EPC) Contractor.

He said this is part of the 3,600MW cumulative power capacity which includes Kaduna IPP (900MW) and Kano IPP (1,350MW)

“Our ambition is to create capital power plants across the country in small scale where transmission issues will not become a major concern; Expanding access to energy will change the game, It will create a better investment climate and promote balanced economic growth, a win-win situation for the Nation and for NNPC as a commercial company,” he said.

The project according to NNPCL was necessitated by the need to deliver gas towards achieving additional power generation capacity in Nigeria and make a substantial contribution to the positioning of gas as the preferred fuel for power.

The first phase of the project has a capacity of 350MW consisting of one gas turbine and one steam turbine

Situated on 54.7 hectares of land at Gwagwalada, Abuja, the project has a combined cycle of three power train blocks of 4500 megawatts (MW) each, Two gas turbines, Two heat recovery and steam generators, one steam turbine and can generate 10.3m MW per hour of electricity.

Power

Stakeholders ask Africa to look inward for hydrocarbon exploration funding

• Demand speedy implementation of PIA, African Energy Bank
Stakeholders at the Nigeria Association for Energy Economics (NAEE) said funding for the exploration of hydrocarbon deposits across Africa should come from the continent instead of looking up to Europe and America for help.

NAEE in a communique signed by its President, Prof. Yinka Omorogbe and Vice- President (Conferences and Publications), Prof Ben Obi, noted that in light of decreased global funding for hydrocarbon activities, Africa needs to realise that funding of non-renewable energy resources needs to come from within.

While most African countries depend heavily on revenue from hydrocarbons, the huge oil and gas reserves may remain untapped due to climate change concerns and reluctance to fund non-renewable energy.

As of December 2020, total private wealth in Africa without the addition of Africans in the diaspora was approximately $2 trillion

The stakeholders lauded the initiative between Africa Petroleum Producers Organisation (APPO) and the AfreximBank to establish the African Energy Bank, which would provide funds for oil, natural gas and other energy projects.

They also agreed that there is an urgent need to implement Nigeria’s roadmap for energy transition, particularly as domestic natural gas consumption expands.

NAEE said gas must become an integral part of the future energy mix, insisting that delays could negatively impact Nigeria’s economic development.

The players stated that the Nigerian oil and gas sector would play a pivotal role in Nigeria’s Energy Transition Plan, and that partnership with the renewable energy sector to jointly drive the implementation would increase the success rate.

The stakeholders, while acknowledging and emphasizing the need for a functional electricity sector with a sustainable, available and affordable electricity supply, said industrialisation would not be possible without a regular power supply.

“Political stability is essential, as are the continuity of government reform and development programmes, which prioritise economic prosperity and the need for meaningful sustainable economic and national development,” the communique said.

The experts hailed the ongoing implementation of the Petroleum Industry Act (PIA), noting that continuous growth, strengthening, enablement and stability of the Nigerian Upstream Petroleum Regulatory Commission (the Commission) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority were vital to the growth of Nigeria’s energy sector.

“Nigeria needs to scale up the utilisation of her substantial natural gas resources for the development of her people; therefore, participants recommended the speedy implementation of the provisions in the Petroleum Industry Act that establish the framework for natural gas utilisation, and where needed, any amendments to the law that will create an attractive investment climate,” it stated.

According to the association, the hopes of the rural energy poor lie in the use of off-grid renewable energy sources.

Lauding the initiatives of the Nigerian government to electrify communities outside the electricity grid network through the Rural Electrification Agency, NAEE recommended that the initiatives should be sustained to alleviate poverty.

The current huge burden of subsidy removal on Nigerians, according to the association, could be alleviated by a rapid expansion of measures to speed up the utilisation of natural gas as a substitute for premium motor spirits (PMS).

“These include promoting the activities of the Natural Gas Expansion Programme, the conversion of engines to run on compressed natural gas (CNG) and the speedy deployment of CNG stations all around the country.

“The present crushing effects of the removal of the PMS subsidy need to be alleviated through measures such as mass transportation programmes and others that are directly targeted at most of the affected Nigerians.

“The long-overdue rehabilitation of existing refineries remains a necessity, to promote diversification and guard against monopoly power, noted conference participants,” NAEE said.