Oil & Energy
NNPC Explains Delay In Take-Off Of Private Refineries
The Nigerian National Petroleum Corporation (NNPC) provided insights into the reason why some completed private refineries are yet to commence production.
Chief Operating Officer (COO), Refineries, NNPC, Mustapha Yakubu, gave the insights as a panelist at the ongoing 2021 Nigerian Oil and Gas (NOG) conference in Abuja.
The panel dwelled on the topic: “What strategies in the mid and downstream sectors will take Nigeria closer to energy self-sufficiency?”
According to Yakubu, the investors are yet to conclude an arrangement with the corporation on the procurement of feedstock for the refineries.
He disclosed that ordinarily, crude oil is sold in foreign currency but owing to the volatility of foreign exchange, NNPC has arranged to sell crude to private refineries in local currency (Naira).
“Today, they have a challenge. Some of them constructed refineries today, they cannot start because we are discussing how to allocate crude to them.
“We are asking them to pay in foreign exchange. You know what is happening to foreign exchange today: volatility. So, we have to find a common ground so there is a discussion in that regard to allow them pay in local currency” he said.
The COO noted that NNPC was collaborating with the private investors in order to encourage them.
He said the partnership has become necessary because it is possible for the investors to build refineries without have feedstock: crude or condensate to refine.
“Whatever they do, they have to work within certain regulations. Refineries are not bakeries. I can go to Wuse Market and buy flours. But for those refineries, you need feedstock whether crude or condensate.
“This crude belongs to the government so there is a need for collaboration. We need to support them. Because you can build a refinery and there is no crude. What happens? The partners will be running after them.
“Government needs to make money from this crude oil. A lot of sectors need money. The health sector needs money. There should be that assurance if I give you crude you have to pay for it and you need to also deliver the balance”, Yakubu said.
Also speaking during the occasion, Chairman, Major Oil Marketers of Nigeria (MOMAN), Adetunji Oyebanji, said that the private investors were reluctant to replicate the establishment of Compressed Natural Gas (CNG) across the country because of the high cost of the equipment.
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Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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