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FG boosts gas production, may revoke 132KV power contract

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GASFEDERAL Government’s efforts to sustain the existing improvement in power supply received a boost at the weekend with the unveiling of the Oredo Integrated Gas Handling Facility (IGHF) by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke.

It was at the Nigerian Petroleum Development Company (NPDC) operated Oredo field in Edo State.

The facility which currently supplies 65 Million Metric Standard Cubic Feet per Day (MMscfd) has ramped up NPDC’s total gas production to a record level of 400MMscfd with projected growth to 600MMscfd by year end is envisaged to significantly enhance the Federal Government’s power supply drive.

At the ceremony, Mrs. Alison-Madueke noted that the project was in line with the ongoing reform process in the industry designed to vigorously ensure the monetisation of the nation’s gas endowment through gas-to-power and other gas-related industrialisation.

However, the Federal Government has threatened to revoke the contract for the 132KV power sub-station in Umuahia, Abia State if the contractor handling the project which was awarded to Valence Nig. fails to rectify a fault with one of the transformers meant for the facility.

The 132KV Sub-Station, which was commissioned despite the fact that one of the transformers was faulty, has the capacity to generate 64MWTs of electricity to Umuahia and its environs. At present, it supplies 33megawatts of electricity due to the fault.

Meanwhile, arrangements have been concluded for the take-off of the first private power plant in the country, Geometric, in March this year.

The company, which belongs to the immediate past Minister of Power, Prof. Barth Nnaji, is working out ways to absorb and train some former workers of PHCN for employment at the plant.

Managing Director of the firm, Mrs. Agatha Nnaji who disclosed this when the National Good Governance Tour Team inspected the plant in Aba, Abia State, said that three turbines had been installed and that the company had entered into an agreement with Shell Petroleum Company for the supply of gas.

And the Co-ordinating Minister of the Economy and the Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said that 2013 is a year of project delivery for the Federal Government.

Speaking at a Town Hall meeting to round off the National Good Governance Tour of Abia State in Umuahia, she noted that the plan of President Jonathan was to make all federal roads motorable within the shortest possible time.

She observed that in line with the transformation agenda of the Federal Government, many projects are being executed, adding that the most important factor was the peaceful atmosphere, which had enabled economic activities to thrive.

Earlier, the state’s Information/Strategy Commissioner, Dr. Eze Chikamnayo, said that in line with the common vision shared by Abia and the Federal Governments, Governor Theodore Orji wholeheartedly supported the good governance media tour. He added: “Having now seen Abia and what are on ground, the people are now in the position to assess and judge the state themselves.”

Alison-Madueke stated that the Oredo gas project, which is 100 per cent local content in both design and construction, is reflective of the Federal Government’s desire to grow and support effective indigenous participation in the oil and gas industry.

“It is this commitment to support indigenous oil and gas production growth that led to the assignment of a number of assets to NPDC. Government’s commitment is further reflected in the Petroleum Industry Bill (PIB) 2012 currently before the National Assembly, where special consideration has been given to indigenous players in the industry,” the minister said.

Providing technical details of the project, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Andrew Yakubu, said the IGHF, which symbolises its response to the Federal Government gas to power initiative is the first major gas development project aimed at realisation of NPDC’s strategic growth plan of being an integrated oil and gas company.

“The Oredo gas plant is an Integrated Gas Handling Facility (IGHF) designed with a module for LPG production and other liquids extraction facilities. While substantial volume of gas from the facility is designed for the Ihovbor power plant, the balance will be injected into domestic gas supply pipelines grid. This facility also has the capacity to eliminate gas flaring in compliance with Federal Government environmental requirement,” he said.

He explained that currently, the Corporation through the NPDC is pursuing with vigor the development of more resources in order to provide gas to PanOcean Oil Company (POOC) to achieve optimal utilisation of their gas plant.

This will require drilling more wells, construction of manifold and flow lines, 22km pipeline and separators. These activities will come along with the related business and employment opportunities,” Yakubu stated.

Managing Director of the NPDC, Victor Briggs, pledged the commitment of management and members of staff of the company to achieving NPDC’s growth plans and business projections.

“I will like to give the Honorable Minister comfort that NPDC will not only meet its gas supply target of 200MMdcfd from OML 111, but will be able to sustain this production for the next 20 years based on existing reserves in this OML; however there are additional exploration potentials,” Briggs enthused.

Established in 1988 as a fully owned company of the NNPC, the NPDC aspires to emerge as Nigeria’s flagship indigenous exploration and production company with world class standard.

In line with that vision, NPDC is today involved in exploration, exploitation and production in 20 concessions covering both onshore and offshore blocks. These efforts translate to current reserves of 2.1 billion barrels of crude oil and 10.17 trillion cubic feet of gas.

As at the last check, NPDC produces an average of 130,000 barrels of crude per day and currently ranks the fifth largest oil producing company in the country. Records indicate that going by recent performance, NPDC is poised to surpass its growth target of 250,000 barrels of oil per day by the year 2015.

The NPDC Oredo IGHF is sited on Oil Mining Lease (OML) 111. The Lease consists of three fields with an average production capacity of 6,000 barrels of crude oil per day (bpd) with more prospects for further development.

Mrs. Nnaji explained that the power plant with the capacity to produce 140 megawatts power of electricity also have an overhead line, a 27-kilometre gas pipeline and a sub-station, which had been completed

She noted that the company had completed all the major works on the project, laid the pipeline for the supply of gas to the plant, adding that the distribution facility is also near completion.

“By March, the first turbine will be fired and the remaining two will follow shortly,” she said.

She added that the company had completed the construction of four sub-stations at different locations in Abia State and acquired and refurbished three sub-stations from PHCN.

The Minister of Information, Labaran Maku, lauded the management of the company for their foresight and courage in venturing into the power business.

He said that the commencement of operation at the power plant would boost public confidence in the present administration’s power reforms.

He stated that take-off of the power plant would be the first evidence of President Goodluck Jonathan’s power roadmap which is being driven by the private sector.

In a related development, four gas turbine units of the Alaoji Power Plant in Abia State will become operational in June this year.

The plant has a combined capacity of generating five hundred and four megawatts of electricity.

The Site Manager of the National Integrated Power Project (NIPP), Umeh Godson, stated when the delegation of the National Good Governance Tour visited the power plant that already, two units had been commissioned and linked to the national grid while the other two are at the pre-commissioning stage.

Umeh explained that all the equipment needed for the steam turbine units have arrived and that they are now constructing the foundation to lay the turbines.

“The first unit will be in service by the end of this year and the second unit will come on stream next year”, he stated.

The Site Manager disclosed that by the time the entire gas and steam turbine units are functional, a total of one thousand and seventy-four megawatts of electricity would be generated from the Alaoji Power Plant.

He, however, said the challenges of gas supply to the power plant are being addressed by the Nigerian Gas Company.

Maku said the Alaoji Power Plant is one of the 10 new power plants being constructed by the present administration across the country to stabilise power supply.

“Alaoji with the capacity of one thousand and seventy-four megawatts of electricity is going to be the largest power plant in the country.

“In the meantime, you have seen that all the equipment including the turbines and the generator of the steam turbines are here and the foundations are being laid”, Maku assured.

Okonjo-Iweala said: “Much has been done, we know there is need to do more but we also need to acknowledge the achievements that have been made. The President instructed me to release the sum of N47 billion for road rehabilitation in December 2012 and the reports reaching the Federal Government indicate that there is a great improvement on the roads”.

She noted that efforts were on to ensure that all the ongoing road projects across the country are completed.

Maku noted that Nigeria would witness a tremendous restoration of the rail system nationwide before the end of 2013 while the modern rail lines would start operation in Nigeria by 2014.

He noted that it would take the North more than 20 years to recover from the socio-economic loss inflicted on the region due to insecurity, particularly the activities of Boko Haram and warned the South-East not to allow insecurity to destroy the development it has achieved over the years.

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