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Vanguard Newspaper 13 February 2018

22— Vanguard, TUESDAY,

22— Vanguard, TUESDAY, FEBRUARY 13, 2018 Gas supply, others deny Nigeria’s power sector N40.55bn revenue in one month •DISCOs’ remittances to NBET still below 30% •Nigeria’s hydropower plants comatose despite FG intervention By Prince Okafor DESPITE over 192 trillion standard cubic feet of gas reserves yet to be tapped, power plants in the country still lack adequate gas to run turbines, giving rise to N40.548 billion revenue losses by the sector in one month. This loss was due to insufficient gas supply, distribution infrastructure, transmission infrastructure and water reserves. Investigation showed that ‘’in January 2018, the highest electricity revenue loss was N1.695 billion occurring on the 1st day of January while the least revenue loss was N906 million on the 11th day of January. On average, N1.308 billion in electricity revenue was lost on a daily basis.” It was also gathered that the largest power generation for the month was 4,148MWh/hour, generated on the 12th day of January 2018, whereas the lowest power generated was 2,596MWh/ hour on the 3rd day of January 2018 while the average daily generation was 3,705Mwh/hour at the national level. Causes of losses Data obtained from the Nigerian Electricity Supply Industry Statistics, NESIS’s website, revealed that the loss was as a result of the shutting down of some gas turbines which led to insufficient gas supply, limitations in distribution and transmission infrastructure and water management constraints in some of the hydro plants. Delta Gas Turbine (GT) 18 tripped on high inlet differential pressure and it was eventually shut down. Para Energy GTs 2 to 9 was shut down due to a planned outage on Ikorodu/Shagamu 132KV Line, putting the total load loss at 68.6mw. Also, Omoku GTs 1 to 3 and 6 tipped on reverse power due to tripping of Alaoji/Afam132kv line, with a total load loss of 53.6mw. Further statistics from the Advisory Power Team indicated that on January 28, 2018, 2277MW was not generated due to unavailability of gas, 150MW was not generated due to unavailability of transmission infrastructure, while 287MW was not generated due to high frequency resulting from unavailability of distribution infrastructure, 290MW was not generated due to unavailability of water. Consequently, the power sector lost an estimated N1,44,000,000 due to insufficient gas supply, distribution infrastructure, transmission infrastructure and water reserves same day. DISCOs’ remittance still below 30% Finding further reveals that the Distribution Companies, DISCOs’ remittances to the Nigeria Bulk Electricity Trading Plc, NBET is still below 30 per cent. This has over time, affected liquidity in the sector. According to the Executive Secretary, Association of Power Generation Companies, Dr. Joy Ogaji, “Just to clarify, GENCOs have no contractual agreement with the DisCos on debt recovery but they have an agreement with the Nigerian Bulk Electricity Trading Plc (NBET) who act as the link between the GENCOs and the DisCos through Power Purchase Agreement (PPA) and vesting contracts. “Therefore, the decision lies with NBET to put in place measures to ensure that the DISCOs improve their monthly revenue remittances which as at today, is below 30 per cent. “Since takeover distribution companies have failed to improve on their networks leading to high load rejection, DISCOs have also failed to meter customers and only insist on tariff hike. Tariff increase should come with a corresponding improvement on distribution infrastructure nationwide. THE average price of Organisation of Petroleum Exporting countries, OPEC’s basket of 14 crudes in the past one week averaged $63.81 compared with $66.87 recorded the previous week. According to OPEC’s calculation, the highest price of crude was recorded on February 05, 2018, which averaged $65.70 per barrel, while the lowest price for the period under review averaged $61.52 Source: Ministry of Power “The GENCOs have repeatedly stated that the transparency and visibility of market funds collected by the DISCOs remain the best way to reduce the liquidity squeeze in the sector but the DISCOs have kicked against this. “There is a need for adequate investment in the distribution infrastructure to increase efficiency. They should further ensure that Service Level Agreements are implemented for distribution companies’ performance based on their business plans.” In a related development, the Eligible Customer Declaration by the Minister of Power which enables GENCOs to sell power directly to some selected class of consumers, when implemented will also help reduce the debt burden of GENCOs.” Oil to hit $80 within six months —Goldman Sachs By Sebastine Obasi THE oil market has rebalanced as Brent will reach $82.50 a barrel within six months, Goldman Sachs, a leading global investment banking, securities and investment management firm that provides a wide range of financial services said. Goldman Sachs has held one of the most optimistic views on the rebalancing of the oil market and oil prices in the near term. It sees the price of brent reaching $75 per barrel within three months, lifting its shortterm oil price projection from the previous $62 forecast. “The rebalancing of the oil market has likely been achieved, six months sooner than we had expected,” the bank’s analysts said in a report. “The decline in excess inventories was fast-forwarded in late 2017 by stellar demand growth, high Organisation of Petroleum Exporting Countries, OPEC’s compliance, heavy maintenance as well as collapsing Venezuela production,” Goldman noted. At the end of last year, Goldman Sachs was more optimistic about the speed of the oil market rebalancing State of power plants The Minister of Power, Works and Housing, Mr. Babatunde Fashola, has put the total percentage contribution of the three hydropower GENCOs in Nigeria – Kainji, Jebba, and Shiroro, to the country’s daily power generation at 26 per cent, up from 15 per cent that he said was the situation in 2015. The minister stated that the contributions of hydropower to Nigeria’s energy mix has reduced that of gas power generation to 74 per cent from 85 per cent he said was the case in 2015. However, Mainstream Energy Solutions Limited, the concessionaire of Jebba and Kainji Hydro Power Plants, invested N288.414 million in its Corporate Social Responsibility, CSR, projects in host communities. According to the company’s Chairman, Col. Sani Bello (Retd), the investments were made in four critical sectors, including education, health, water and power supply, through its Mainstream Energy Solutions Foundation. Col. Bello urged the host communities to ensure a peaceful environment for Mainstream to operate with an assurance that the company was committed to providing more development projects for them. “Considering the fact that the two power plants (Kainji and Jebba ) are two critical national assets, we want to see that there is a good relationship between the company and the communities.“ Further investigation also revealed that arrangement between the Federal Government and the Japanese Government in 2016 to sign all relevant agreements towards securing $800million credit to add 578.4mw of power generation capacity to Jebba Hydro Power Plant, is still pending as till date, there seems to be no manifestation of the project as the plant which was constructed in 1985 still operates at 45 per cent. than many experts and other banks, and OPEC itself. The investment bank expected that the global oil overhang would have cleared by the middle of 2018, accelerating OPEC’s exit from the production cut pact that is currently set to expire at the end of 2018. “The oil re-balancing continued its progress through November,” thanks to factors including “stellar” oil demand growth, Goldman said in December. Now Goldman has revised further up its global oil demand growth forecast, to reflect strong emerging market economies that will drive oil demand growth. Expectations of robust oil demand growth also prompted JPMorgan to raise its forecast, seeing Brent prices averaging $70 this year, with a peak of $78 a barrel at some point in the first half, when strong demand will continue to push prices up. C M Y K

Vanguard, TUESDAY, FEBRUARY 13, 2018— 23 VISIT: Director of Petroleum Resources, Mr. Mordecai Ladan (R) and the new Managing Director & Snr. Vice President, Addax Petroleum Development (Nig.) Ltd Mr. Colin Klappa during a courtesy visit to DPR headquarters, Lagos Electricity watch / Akwa Ibom Govt to build Qua Iboe Power plant By Dennis Udoma PLANS are underway for the establishment of Qua Iboe Power Plant, a new electricity company by Akwa Ibom State Government. The Qua Iboe Power Plant project, which is to be cited at Qua Iboe On-shore Terminal in Ibeno Local Government Area of the state would be operated under Public Private Partnership Agreement (PPA), with the Nigerian National Petroleum Corporation (NNPC) Joint Venture, Dangote Group, Black- Rhino, African Development Bank, International Finance Consortium (I FC) and the Islamic Development Bank as financiers of the project. Governor Udom Emmanuel disclosed this, after a meeting with the investors on the new power plant project in Uyo at the weekend. He said the project when completed, would create employment and boost the economy of the state in particular and country at large maintaining that, with the production of 400 million cubic of gas, the industrialisation policy of his administration shall witness a major leap. Earlier, the Chief Executive Officer and founder of Black- Rhino, Mr Brian Herlihy Why workers are our major assets – NIPCO MD explained that the Qua Iboe Power Plant project has a portfolio of more than $1 billion in partnership with Black-Rhino, Dangote Group and NNPC. He added that the company would build a 570 Megawatts Gas Power Plant using a combined circle technology with General Electric and world class expertise to utilise onshore and offshore gas for its operations to enhance the growth of other industries in the value chain. Nigeria to save billions of Naira training oil workers locally —OGTAN C APITAL flight plaguing the country must be curtailed if the oil industry domesticates training of oil and gas workers, Dr. Afe Mayowa, President of Oil and Gas Trainers Association of Nigeria (OGTAN), has said Speaking ahead of the forthcoming maiden edition of the Nigeria Education Summit of the association billed for April 16, Mayowa emphasised the need to deepen the domestication of training as well as promotion of research and development in the oil sector. According to him, OGTAN has the capacity to train oil and gas workers to THE Management of NIPCO Plc has explained why the workforce of the downstream giant has remained the major asset of the company since its inception in 2004. Managing Director of the company, Mr. Sanjay Teotia who was reflecting on the performance of the integrated downstream operator at the company’s long service awards in Lagos said: “Your efforts over the years have made the organisation remain a benchmark for operators in the downstream sector of the nation’s oil and gas industry. “ The MD who was flanked by the company’s Chief Retail Officer, Harjeet Tuteja and Chief Operating Officer, Suresh Kumar also pointed out that the organisation’s growing recognition and pedigree in the hydrocarbon industry could be linked to the dedication of the staff “as a crop of well-trained and motivated workforce.” Mr. Sanjay who expressed delight on his maiden interface with staff of the company upon his assumption of office as managing director said the event is a component of the organisation’s employees’ recognition process and an opportunity to recognise the awardees for their longevity and service to the company . “Management is not oblivious of awardees’ meritorious contributions, hence the pomp and pageantry that is associated with the event, with a view to positively boost their morale and raise their self-worth before all of us today,” he asserted. Mr. Herlihy further added that the Power Plant project would employ more than 12,000 workers at the construction level and 300 workers during operations. According to him, ‘‘this would have a replicate effect on the indirect job market’’ assuring that the company would be alive to its corporate social responsibilities and sued for more cooperation from both the government and people of the state. international standards. He explained that the focus of the conference is to explore ways by which the obvious gap between the tertiary institutions and the oil industry can be closed particularly in the area of research and development, thereby ensuring that Nigerian university graduates are employable after graduation. “Today, research funds running into millions of dollars set aside annually by oil majors are splashed on foreign institutions as our own tertiary institutions are ill-prepared for such tasks. Therefore, the planned summit is bringing together major stakeholders in the education sector and the oil and gas to discuss their experiences in order to chart a way forward at resolving this obvious gap. The one-day summit on “Sustaining Nigerian Content Development through Quality Education and Training: Challenges and Prospects” would be chaired by a former Head of State, Dr Yakubu Gowon, he said. The theme of the conference, "Sustaining Nigerian Content through Quality Education and Training: Challenges and Prospects," Afe said, would offer the association a chance to diagnose real problems before solutions can be offered. "This is the only way the Nigerian content development can be sustained," he added. He also said there is a need for a review of curriculum to meet contemporary needs, because the university curriculum doesn't meet the practical needs of the industry. The one day conference will be chaired by former Head of State, General Yakubu Gowon, under whom the first indigenisation law was signed in 1969. Source: NCC Daily Operational Report SSAEAC commends TCN on new national peak load attainment THE Senior Staff Association of Electricity and Allied Companies, TCN Branch, has commended the efforts of the TCN on attaining new national peak load for the country. In a statement signed by the association’s branch Secretary, Mr. Yerima Hassan, the association stated: “ We attained two new national peak loads of 5,155mw and 5,222.4mw on December 8th and 18th, 2017 respectively. The previous national peak load was recorded on February 2, 2016 and it was 5,074mw. “The establishment of Transmission,Rehabilitation and Expansion Programme, TREP, was to improve the grid in terms of wheeling, stability, and reliability. We appreciate the Kaduna 330kv SC line in the quad and the building of several 330kv and 132kv substations at Bauchi, Daura, Jogana, Sokoto, Argungu as we pray for more. “We appreciate the successful achievement of Frequency control (achieved 49.50Hz and 50.50Hz, which was the first time in 20 years). This led WAPP to set up committee for synchronisation of power from Nigeria and the rest of West African countries. The plan devised by your management to further stabilise the frequency at 50.75Hz to 50.25Hz in the near future ,is a welcome development. “The established TREP has attracted $1.5 billion from several donors. TCN had never attracted more than $200 million in one year in its history. TREP seeks to expand the grid to at least 2,000mw in four years and will put N-1 capacity all over Nigeria. “ Several transmission lines constraints that had lingered between three to four years, had been resolved; these include Jebba-Kainji, Asaba-Benin, Ajaokuta-Abuja, Egbin-Aja and turn-in turn-out for the evacuation of Azura IPP. The 2012-2014 and 2015 audit had been concluded and 2016 audit is about to be finalised. TCN had never submitted audited financial statement since it was created in 2011.”