Oil & Energy

Gas As Ultimate Resource For Power Generation

Published

14 years ago

June 18, 2012

Gas utility as a major resource for electricity generation is beginning to take the fron-tis-piece in Nigeria’s power sector. The product before now was limited to providing cheap energy for cooking but its necessity and impact in power generation has become so significant that the problem of regular electricity supply in this country can only be aggressively addressed with the use of gas.

There is increasing interest among Federal and State Governments as well as companies towards absolute utilisation of gas to facilitate electricity generation.

The Federal Government’s focus now is on how to increase gas supply to power plants in this country through the aggressive execution of the on-going 12 –month gas emergency time line to fire the gas-to-power scheme.

On its part, the Kwara State Government is already discussing with some investors that would use gas to generate electricity for the state. The Governor, Abiola Ajimobi acknowledged the importance of gas pipeline to the development agenda of his administration, when the House of Representatives Committee on Petroleum (Downstream) led by its Chairman, Hon. Dakuku Peterside visted him at Ibadan recently on oversight function to assess NNPP facilities there. Peterside directed that faulty gas pipelines should be repaired without delay.

The managing Director, Shell Petroleum Development Company (SPDC), Mutiu Sunmonu said Shell is taking adeguate steps to improve gas supply to power plants in the country, pointing out that the company’s Utorogu Gas Plant in Ugheli, Delta State currently products 250 million standard cubic feet per day (mmscf/d) while work is going on at a new plant designed to increase capacity to about 510 mmscf/d which will have significant impact on power generation.

While the Ministry of Power Resources, Nigerian National Petroleum Corporation (NNPC), International Oil Companies and the Nigeria Gas Company (NGC) are making efforts to bridge the gap in gas supply, the Managing Director of Niger Delta Power Holding Company (NDPHC), Mr. James Olotu says the delivery of the 1,025 megawatts into the national grid would be dependent on the availability of gas. He said that many power stations across the country are facing gas constraints which is being already addressed by the Federal Government.

According to him, Omotosho Power Plant has commenced operation and 70 megawatts added to National Grid through the plant, noting that in Sapele power station, only one unit can be fired, out of the three units because of gas constraints. With its unending complaints and sharp practices among the staff, the Power Holding Company of Nigeria (PHCN) is owing the Nigeria Gas Company an over N40 billlion for gas supplied.

In 2010, government’s efforts at improving power supply got a boost with the commencement of gas supply to PHCN facilities through the NGC and via the Pan Ocean Oil Corporation (POOC), operator of the NNPC Pan Ocean Joint Venture. POOC currently supplies 50 million standard cubic feet per day (mmscf/f) of gas to the NGC from its Ovade-Ogharefe gas processing plant.

Pan Ocean managing Director, Mr. Festus Fadeyi once said. “We are very pleased that Pan Ocean is leading the flare-out agenda of the Federal Government and has commenced supply of gas to increase power generation to the national electricity grid”.

Nigeria Liquefied Natural Gas (NLNG), Brass Managing Director, Mr. Vincenzo Diloriuzo noted that there is enough gas in the country to ensure the success of the LNG project.

Government has over the time showed lack of political will in the issue of gas flare. Gas flare has negative effect on man and environment yet nothing was done, it takes a strong political will to actualise the gas-to-power agenda of the present administration vis-à-vis adequate generation, distribution and transmission of electricity through availability of sufficient gas. At the moment, gas produced for local consumption has grown to 930 million standard cubic feet per day (mmscf/d) and power generation from gas is more than 1829 megawatts.

Nigeria is adjudged the world’s 7th largest producer of high grade gas with zero per cent sulphur and rich in natural gas liquids with proven huge reserves of more than 182 tonnes per cubic feet, so our gas capacity should be enough to achieve the gas-to-power aspiration of the Federal Government, and make gas readily available to industrial customers that should in turn generate accelerated growth of manufacturing. We have a number of oil and gas companies that control a considerable share of the gas distribution here in the country and generally the gas market worldwide.

Utilising such companies maximally will facilitate the country’s power projects.

Not just international oil companies should participate in the gas project but indigenous firms should be given priority attention or consideration. Gas to power distribution is the boost the country actually needs now and there must be a corrupt –free national strategy for managing the gas revenues.

In his Democracy Day nationwide broadcast, President Goodluck Jonathan announced the government’s plan to ensure reliable power supply through the judicious implementation of the power sector road map which is at an advanced stage to fully privatise the generation and distribution of electricity to all levels of the country.

According to him, his administration is committed to the provision of regular and uninterrupted power supply, which he said remains unwavering, adding “we all agree that adequate and regular power supply will be the significant figure to enhance transmission with capacity and accelerate growth. It is for this reason that I remain optimistic that the reform we have initiated, the decisions we have taken so far and the plans we intend to strictly prosecute will yield desired result”.

He disclosed that to underline this commitment, a special session on power was convened to engage Custain Construction Company in contracting for gas production and delivery to ensure enough availability of power.

The President directed that the power sector reform was concluded on schedule and that the privatisation of the sector will be completed according to plan. The privatisation process, he noted, has attracted expression of interest from 131 companies across the globe.

The Federal Government has a two-point approach to the power agenda which are immediate repair of power plants as well as transmission and distribution of infrastructure in the short term and the building of power stations and provision of enablance to attract investors. It is also committed to accelerating the completion of the National Independent Power Project (NIPP) while building about 4,000 Kilometers of transmission lines and hundreds of substations, just as the design for the construction of hydro-power plants which will add about 3,000 megawatts to the national grid has been completed.

The National gas Emergency plan has not helped the problem of gas supply due to poor planning.

One yardstick to measure the level of development of any nation is its power generating capacity. Power is a critical element as it drives growth and development.

In Nigeria, generating adequate power to drive the economy has been a nagging problem and the problem continues to be insurmountable as efforts by previous governments could not yield the desired results. The availability of reliable electricity power to homes and businesses of our citizens has been one item in our national life that we have approached with so much hope and yet experiencing so much frustration over the past decades.

In recent decades, subsequent regimes have put in billions of naira to reverse the neglect and mismanagement which has characterised the power sector. The President Jonathan-led administration has expressed the commitment to bring an end to the nation’s stunted growth and usher in the fresh air of prosperity by pursuing a new era of sector-wide reform, which is driven by improved service delivery to every class of customer in the Nigeria electricity sector.

This prompted Jonathan to set up the Presidential Action Committee on Power, which he explained was to eliminate bureaucracy and inefficiency in decision-taking. He expressed the hope that the power sector reforms would succeed like that of the telecommunications sector.

Gas fired plants had been established across the country, capable of generating between 25,000 megawatts and 30,000 MW and many investors have indicated interest to invest in the power sector, so the problem of lack of gas to run existing power plants must be resolved to ensure that sufficient gas is available for more power plants that are being planned.

Nigerians are complaining that in spite of poor power supply, they are paying high electricity bills and they are expecting the government to quicken the installation of pre-paid meter in every household so that people pay for what they consume. A good number of Nigerians are also expecting President Jonathan to make a difference and to be the first leader to permanently solve the power problem in this country.

There are challenges which if not properly addressed by the government could truncate the growth plans in the gas to power initiative which include funding, regulations, sanctity of contract and community issues amongst others. The government must look into them critically and urgently too. A situation where local finance institutions are not able to muster the finance for gas sector investment even after the capitalisation exercise is totally unacceptable and will not urgur well for the sector.

Shedie Okpara

Oil & Energy

Abia Secures $145m Investment Commitment To Establish Solar Manufacturing Plant

Published

4 days ago

July 20, 2026

The Tide

Abia State Governor Alex Otti has welcomed a proposed $145 million investment to establish a solar manufacturing plant in Isiala Ngwa South Local Government Area, describing it as a major boost to the state’s industrial and renewable energy ambitions.

The development was disclosed in a statement issued last week by the Chief Press Secretary to the Governor, Ukoha Njoku Ukoha, after Otti received the investors, led by their Team Leader, Dr. Oko Jaja, at the Government House in Umuahia.

During the meeting held on July 16, 2026, Otti said he was encouraged that the proposed project had reached the Final Investment Decision (FID) stage, with the investors committing up to $145 million to establish the solar manufacturing facility in the state.

What they are saying

Governor Otti welcomed the investors’ commitment, saying the project had progressed to the stage where they were ready to invest up to $145 million in Abia.

“I’m glad that at least you have reached the final investment decision where you are investing up to $145 million.”, he said.

He also assured the investors of the state’s continued support, noting that the government had already provided the land required for the project and remained willing to address any additional requirements needed to facilitate the investment.

“We had to do everything that was required to make the land available. And we would like to assure you that if there is any other thing that you need for this investment, do not hesitate to let us know”, the Governor said.

Speaking on behalf of the investors, Dr. Oko Jaja said the project, being developed with Chinese partners, had advanced significantly and that the first tranche of funding is expected to be released by September 2026, paving the way for implementation.

Also speaking, the Chief Executive Officer of MD NWAKANMA NIGERIA Limited, Dennis Madu Nwakamma, said construction of the plant is expected to commence by the end of September under a public-private partnership with the Abia State Government. He added that the project will manufacture solar panels and related products while creating jobs and providing technical training for young people in the state.

The proposed investment adds to Abia’s growing push into the renewable energy sector. The state is among the few in Nigeria with a regulated electricity market and is home to Geometric Power, whose integrated power system supplies electricity to Aba and surrounding communities.

The development also follows Governor Otti’s recent commissioning of an upgraded 5MVA power station at Abia State University, which doubled the facility’s capacity from 2.5MVA to improve electricity supply within the institution.

Earlier, in February 2024, he commissioned the 188MW Geometric Power Plant, a landmark project aimed at expanding power generation and improving electricity access in the state.

The proposed solar manufacturing facility is the latest in a series of investment projects announced for Abia as the state seeks to attract private capital into manufacturing and infrastructure.

In March, Governor Otti commissioned a $35 million industrial facility in Aba, part of a planned $100 million investment expected to deepen the city’s manufacturing base and attract additional private sector activity.

The state government has also completed the acquisition of Afro Beverages from the Asset Management Corporation of Nigeria (AMCON) after paying N500 million to facilitate the revival of the company.

Separately, the Federal Government and the African Development Bank have urged the Abia State Government to resolve administrative delays affecting the commencement of the $263.8 million Abia State Integrated Infrastructural Development (ABSIID) project, which is expected to strengthen infrastructure and support economic growth across the state.

Oil & Energy

FG Urges Against Operators’ Actions That Could Distabilise Market

Published

4 days ago

July 20, 2026

The Tide

The Minister of Power, Chief Joseph Tegbe, has called on operators in the Nigerian Electricity Supply Industry (NESI) to avoid actions that could affect the decentralised electricity market.

The minister made the call at the workshop on Legal, Policy and Regulatory Harmonisation between federal and state institutions on the Decentralisation of the Nigerian Electricity Supply Industry (NESI), in Abuja.

Tegbe said the Federal Government retains an important leadership role, while state governments now have expanded responsibilities; the Nigerian Electricity Regulatory Commission (NERC)continues to regulate areas within its jurisdiction; and state regulators are emerging to supervise their respective markets.

He further stated that transmission remains a national asset; distribution companies continue to serve millions of customers; generation companies continue to supply energy into the grid; private investors provide capital; development partners provide technical support; while consumers remain at the heart of every decision.

Nothing that none of these institutions exists in isolation, he said: “Our success is interconnected. This is why collaboration must become the defining principle of our decentralised electricity market. We must ensure collaboration rather than competition between institutions. We must build alignment instead of regulatory conflict. We must practice mutual respect instead of jurisdictional rivalry.”

He said the Electricity Act did not establish parallel electricity industries, but complementary electricity markets, operating within one national framework.

“Our objective must therefore be regulatory coherence. Investors should not encounter conflicting rules. Developers should not navigate contradictory approval processes. Consumers should not become casualties of institutional uncertainty. Market participants should enjoy clarity, predictability and confidence wherever they choose to invest,” he stated.

Oil & Energy

Fuel Imports Surged By 207% In June — NMDPRA report

Published

4 days ago

July 20, 2026

The Tide

Nigeria’s petrol importation surged by 207 per cent in June 2026, even as domestic Premium Motor Spirit supply fell by 22 per cent, according to the latest data released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The development marked a sharp reversal from the pattern recorded at the beginning of the year when domestic refining was supplying the bulk of the country’s petrol requirements.

The NMDPRA’s June 2026 Fact Sheet, obtained by our correspondent on Saturday, showed that average daily PMS imports rose from 5.9 million litres in May to 18.1 million litres in June.

The 12.2 million-litre daily increase represented a 206.8 per cent month-on-month rise.

In contrast, domestic PMS receipts fell from 41.5 million litres per day in May to 32.5 million litres per day in June, representing a decline of 9 million litres or 21.7 per cent.

Despite the sharp drop in domestic supply, total PMS receipts rose from 47.4 million litres per day in May to 50.6 million litres per day in June. This represented an increase of 3.2 million litres per day or 6.8 per cent.

The report read, “Total PMS receipts rose by seven per cent from 47.4 million litres per day in May to 50.6 million litres in June, driven by a 207 per cent surge in imports to 18.1 million litres, even as domestic supply fell by 22 per cent to 32.5 million litres per day.

“Domestic daily receipts include DPRP gantry and all coastal evacuation receipts. Consumption data is based on volumes trucked out from all facilities into the domestic market.”

The figures suggest that the increase in imports more than compensated for the decline in domestic supply during the month.

The development is significant because Nigeria entered 2026 with a much stronger domestic supply position. In January, domestic PMS supply was reported at 40.1 million litres per day, accounting for about 61.8 per cent of the country’s petrol supply, while imports averaged 24.8 million litres per day.

However, imports fell sharply to 3.0 million litres per day in February before rising to 5.9 million litres per day in March. The country’s dependence on imports then remained relatively low through the following months before the sharp increase recorded in June.

Compared with January, June’s domestic PMS receipts of 32.5 million litres per day were 7.6 million litres, or 19 per cent, lower than the 40.1 million litres recorded at the beginning of the year.

Conversely, June’s import volume of 18.1 million litres per day was 6.7 million litres, or 27 per cent, below January’s 24.8 million litres per day.

However, the composition of supply changed considerably. While domestic supply accounted for the larger share of the market in January, the June figures showed a much greater reliance on imports to supplement local production.

The June data also showed that the country’s crude oil receipts by domestic refineries improved during the month.

Crude oil receipt by domestic refineries rose from 0.578 million barrels per day in 0.632 million barrelsMay to per day in June, an increase of 0.054 million barrels per day, or 9.3 per cent.

The NMDPRA rounded the increase to 10 per cent in its fact sheet.

The rise in crude receipts occurred at a time when domestic PMS supply decreased, indicating that higher crude deliveries alone did not immediately translate into higher petrol receipts in the domestic market.

The figures could also reflect changes in refinery operations, product yields, maintenance activities, evacuation arrangements and the balance between domestic production and imported products.

The June fact sheet further showed that average daily PMS consumption increased marginally from 46.3 million litres in May to 47.4 million litres in June.

The 1.1 million-litre increase represented a 2.4 per cent rise.

The increase in consumption, however, was far smaller than the 207 per cent jump in petrol imports.

As a result, the country’s petrol stock position improved during the month. PMS stock sufficiency rose from 16.2 days in May to 19.7 days in June.

This represented an increase of 3.5 days, or 21.6 per cent.

The improvement means that the country entered July with almost 20 days of petrol stock sufficiency, despite the increased reliance on imports.

The increase in petrol stocks is significant against the background of the supply disruptions and price volatility that have characterised the downstream petroleum market since the removal of petrol subsidy.

At the beginning of 2026, the NMDPRA reported that PMS stock sufficiency had risen to 33 days in January, compared with 29.2 days in December 2025. However, the stock position subsequently declined before recovering to 19.7 days in June.

The June data also showed a dramatic increase in imported Liquefied Petroleum Gas, popularly known as cooking gas.

Total LPG receipts rose from 4.1 kilotonnes per day in May to 5.1KT per day in June, representing a 24.4 per cent increase.

Domestic LPG receipts, however, fell from 4.0KT per day to 3.6KT per day, a decline of 0.4KT per day or 10 per cent.

Imports rose from 0.1KT per day in May to 1.5KT per day in June.

That represented an increase of 1.4KT per day, or 1,400 per cent.

The sharp increase in LPG imports helped push total receipts higher, even as domestic supply declined.

The figures indicate that LPG supply exceeded consumption during the month, potentially supporting inventory replenishment.

The supply of Automotive Gas Oil, commonly known as diesel, declined by 14 per cent in June.

AGO receipts fell from 18.8 million litres per day in May to 16.2 million litres per day in June, a decline of 2.6 million litres or 13.8 per cent.

The decline was entirely recorded in domestic receipts as the country recorded no AGO imports in either May or June.

The NMDPRA data showed that diesel consumption remained unchanged at 16 million litres per day in both months.

Consequently, June’s total AGO receipts of 16.2 million litres per day were only marginally above consumption.

Despite the lower supply, AGO stock sufficiency improved from 31 days in May to 37.1 days in June.

That represented an increase of 6.1 days or 19.7 per cent.

The rise in stock sufficiency, despite lower daily receipts, suggests that existing inventories continued to provide a substantial buffer for the diesel market.

The supply of Aviation Turbine Kerosene also fell during the month.

ATK receipts declined from 3.6 million litres per day in May to 2.5 million litres per day in June.

The 1.1 million-litre decline represented a fall of 30.6 per cent.

ATK consumption also fell from 3.1 million litres per day to 2.9 million litres per day, representing a 6.5 per cent decline.

The drop in consumption was, however, significantly smaller than the decline in receipts.

Domestic gas supply rose marginally during the period under review.

The NMDPRA reported that domestic gas supply increased from 4.984 billion standard cubic feet per day in May to 5.116Bscf/d in June.

The increase of 0.132Bscf/d represented a 2.65 per cent rise.

The authority said its domestic gas supply figure includes volumes supplied to the Nigeria LNG Limited.

The modest improvement came as the Federal Government and industry stakeholders continued to focus on increasing gas availability for power generation, industrial production and other domestic uses.

The January-to-June 2026 trend points to a petroleum market that has remained heavily influenced by the changing balance between domestic refining and imports.

Nigeria began the year with domestic PMS supply accounting for the majority of total supply. January’s 40.1 million litres per day from domestic sources compared with 24.8 million litres per day from imports.

By June, however, domestic supply had fallen to 32.5 million litres per day, while imports stood at 18.1 million litres per day.

Although the absolute volume of imports in June remained lower than January’s figure, the sharp increase from the May level showed how quickly the market could turn to imported products when domestic supply weakened.

The trend also highlights the continuing importance of domestic refining capacity to Nigeria’s fuel security.

In May, the Dangote Petroleum Refinery supplied an average of 41.5 million litres of petrol daily, according to reports based on the NMDPRA’s monthly data. The figure was significantly higher than the 40.1 million litres per day recorded in January. However, June’s domestic PMS receipt fell to 32.5 million litres per day.

The development comes amid the gradual transformation of Nigeria’s downstream petroleum sector, with the Dangote refinery increasingly supplying the domestic market while imports continue to act as a balancing source.

The figures also demonstrate that increased refinery crude supply does not automatically guarantee a corresponding increase in domestic petrol receipts. In June, crude receipts rose by about 9.3 per cent, while domestic PMS receipts fell by 21.7 per cent.

For consumers, the most immediate implication is that the country’s petrol supply system remains dependent on a combination of local refining and imports.

The June data therefore presents a mixed picture: domestic refining received more crude, total petrol supply increased and stock levels improved, but local PMS receipts fell sharply while imports surged.

In the wider downstream sector, diesel supply remained entirely domestic, LPG imports increased dramatically to supplement weaker local receipts, aviation fuel supply declined and gas availability recorded modest growth.

The data underscores the continuing transition of Nigeria’s petroleum market from an import-dependent system to a mixed supply structure in which domestic refineries are expected to provide the bulk of demand while imports fill supply gaps.