When a senior aide of President Umaru Yar’Adua hinted recently that to the President, “emergency power declaration is about seizing gas from the foreign exporting companies to meet our energy needs,” he was merely re-echoing the now frustration – driven domestic gas policy thrust of the present administration.
President Yar’adua and his people are coming to accept that the problem of inadequate gas supply may hinder the realisation by the end of this year of his promised power generation target of 6,000 mw. This will also negate the most important focus in the blurred seven-point agenda which is power.
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The fact of the matter is that all the power plants put together on full stream would require about 22 billion cubic feet of gas (bcft) per day going by the calculation that to generate one mega watts of electricity would require 4 million standard cubic feet of gas. And at the moment, all that is available as gas for the power plants is less than 2 billion standard cubic feet.
President Yar’adua’s hysteria sterns from the fact that the seven power plants that are key to meeting his 6, 000 mega watts emergency target under the National Integrated Power Project are all designed to run on gas.
So availability of gas is the sole determinant to the realisation of the proposed power generation target and from all indications, this is turning out to be a mirage.
The new Group Managing Director of the Nigerian National Petroleum Corporation (GMD) Mohammed Sanusi Barkindo was very quick to announce at the 2009 Nigeria Oil and Gas Conference in Abuja that the Federal Government has taken urgent steps to provide adequate gas for power plants, as the NNPC, in collaboration with International Oil Companies (IOCs) operating in the country has put in place a short term gas supply plan to deliver about 2 billion standard cubic feet of gas (bcft) to fuel the NIPP by the end of this year.
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According to him, “NNPC is leading a major reform of the gas sector. Specifically, plans are in place and rigorously tracked to deliver 2 billion standard cubic feet per day by end of 2009.This gas volumes will support the delivery of the 6GW power target by end 2009.” It all sound good and very patriotic.
However, this, at best is a cheap political propaganda to impress ‘Oga’.
There is nothing wrong if President Yar’Adua works towards compelling the international oil companies (IOCs) to divert a great portion of produced gas in the nation’s oil fields from their current export targets to fuel the nation’s domestic agenda. However, it is a deceit of the highest order to bark when in real terms the Federal Government (NNPC) has no two coins to rub each other as funding of its joint venture obligations at least as Nigerians were made to understand.
Let us critically examine the issues involved in this Presidential flash-point.
First, even if the IOCs succumb to the federal government’s order, would the Federal Government be ready to buy the gas at price regimes obtainable at the international markets?
The answer to the above question is very important because if it’s yes, that may be taken as part of the incentives to lure the IOCs into considering freeing part of their produced gas. And if the answer is no, then funding issues for new projects and/or expansion of existing ones may be a great impediment to the Presidential bravado on this matter.
Also, it is one thing for the Federal Government and the IOCs to agree to supply gas to the power plants. And it is another thing for the Niger Delta militants to allow access to the resource. Let’s leave that for now.
Head or tail, Nigeria will be the looser because in our environment that is devoid of transparency and the will power to be honest, the present coercing tactics by the federal government may just open up a floodgate for fraud by the IOCs. The foreign producers may use such initiative to manipulate existing understandings for heavy gains.
Another critical issue on the government’s hard stance on availability of gas for the NIPP borders on interpretation of the directive by some sectional interest groups in the country. It has already been turned into politics.
President Yar’Adua’s perceived hard stance on the issue of freeing gas by the IOCs for the power initiative as against the current LNG- focus is already being misinterpreted to mean a canvass to cancel some Liquefied Natural Gas Projects (LNG) initiated by the Obasanjo administration in the Midwest and southwest regions.
According to a very top level NNPC official, “Yar’Adua’s government is exhibiting diminishing enthusiasm for big LNG projects. Olokola Liquefied Natural Gas (OK LNG) in Ondo and Ogun states is now regarded by some in Abuja as a ‘Yoruba project’, and questions are being asked about the tendering process that led to the main construction contract award to Technip.”
Truth be told, this issue of availability of gas for the President’s power emergency is a fallout of the abysmal failure of the NNPC to get its acts right since it came into existence as the nation’s apex oil and gas concern.
It is a disgrace that the NNPC subsidiary in charge of domestic gas business, the Nigerian Gas Company (NGC) does not produce a single burble of gas. It only collects from the IOCs and sells without even paying the producing companies as at when due.
The NGC cannot point to a single well it drilled to produce gas even if it is a dry hole. And it is uncertain if the company gets a single bubble of gas from the only NNPC producing subsidiary- the Nigerian Petroleum Development Company (NPDC). Of course, the NPDC has remained a marginal field producer only engaged on farm-in and farm-outs. So how can it source for the gas needs of its sister company- the NGC and by extension the PHCN - the shame of a nation.
IFEANYI IZEZE, ABUJA ([email protected])
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