• Tue. Mar 21st, 2023

    Electricity: Nigerian govt cuts gas price to power projects by 12.8%

    ByBassey Udo

    Jul 29, 2021


    The Federal Government has announced the downward review of the price of gas supply to power projects in the country.
    The Minister of State for Petroleum Resources, Timipre Sylva, who made the announcement in Kano on Thursday said the price was reduced by $0.32 cents, or 12.8 percent, from $2.50 per million BTU to $2.18 per BTU for domestic gas supply obligation (DSO).
    He was speaking at the 2021 Gas Sector Stakeholders’ Forum on the theme: “Optimizing the Economic Development Capacity of the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project.
    The decision to review downward the price of gas followed robust negotiations between the federal government, Labour and other industry stakeholders.
    The price of gas has always been one of the key issues raised by electricity generation companies for their inability realize their performance targets and mandate of generating electricity for the country.
    “Let me use this medium to announce to this gathering that following the successful negotiation between the FGN and the Organized Labour Unions, and the detailed review of the gas pricing framework in Nigeria, the price of gas-to-power has been reduced from $2.50/mmbtu to $2.18/mmbtu(domestic supply obligation – DSO) with immediate effect.
    “The outcome of the negotiations and review have been communicated to the relevant stakeholders,” the Minister announced.
    Sylva said the completion of the AKK gas project would further enhance government’s drive towards expansion of domestic gas penetration in the country.
    The successful completion of the AKK project in 2023, Sylva said would significantly enhance Mr. President’s vision and current drive for increased domestic gas utilization as the mainstay for national industrialization, increased foreign investment, government revenue growth and ultimately provide more job opportunities for Nigerians.
    The minister added the “National Gas Expansion Programme,launched in January 2020 was the flagship initiative to ensure all these objectives were achieved and the gains emanating therefrom sustained.
    Sylva said the forum was focused on facilitating increased gas penetration in the northern part of the country, especially the AKK pipeline corridor of FCT, Kano, Kaduna, Kogi, Niger, Nasarawa and other neighbouring states.
    The Forum, he said, was geared towards sensitizing the entire northern part of Nigeria of the upcoming opportunities to bring both new and hitherto moribund companies to life.
    The Forum,the Minister said, would ensure collaboration amongst stakeholders towards kick-starting the required activities to guarantee full utilization of the gas to be delivered through the AKK pipeline when completed.

    “Today’s event reinforces our commitment of the government to realize the inherent potentials of gas usage as a national catalyst for achieving economic diversification from crude oil and as a transition fuel from fossil of today to the renewable energy of tomorrow,” Sylva said.
    He said the commitment informed government’s support and eventual commissioning of two gas-powered plants in Kano in December 2020, to ensure uninterrupted delivery of over 30 mega watts of electricity to the industrial hubs in the city.
    The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, reassured Nigerians that the construction of the gas pipeline project would be delivered on schedule.
    Kyari said the completion of the multi-billion gas infrastructure would bring prosperity for the people through massive job opportunities and guarantee peace for the country.
    In his presentation titled “The AKK Pipeline Project as an Economic Development Game-Changer – NNPC’s Vision, Contributions, & Plan Forward,” Kyari said the project would help the country to revamp about 232 industries across the country, creating massive employment opportunities and prosperity for the people.
    Also, he said the project, when completed, would serve as gas supply link to other African countries and Europe and a huge revenue earner for the country.
    “This project has been on the drawing board for over 30 years and the dream was to have gas from the oil fields in the Niger Delta delivered to Europe across the Trans-Sahara route.
    “What we are seeing today would deliver at least 2billion standard cubic feet of gas to the domestic market at the first instance, with the potential to increase its capacity. What this means is that it will debottleneck the gas supply network in the entire country,” Kyari said.
    The AKK gas project, the GMD said, would also lead to the development of three Independent Power Plants (IPP) in Abuja, Kaduna and Kano, in addition to the IPPs that would boost electricity supply and promote the growth of small and medium scale enterprises in the Nigeria.
    “I want to state clearly that this gathering would not have been possible if we don’t have a line of sight to the completion of the AKK gas pipeline project. This is possible because of the clear direction Mr. President has shown on the need to deepen domestic gas consumption with a view to creating prosperity out of the enormous gas resources we have as a nation.
    “The President has given us (NNPC) all the necessary support and incentives to deliver on this project on schedule, and we are committed not to fail,” he said.
    The AKK gas project, Kyari said, would also boost the Agricultural, Industrial, Manufacturing and Power Sectors of the economy for the overall growth of the nation’s economy.
    He said the AKK gas pipeline project was in sync with the aspiration of the Federal Government to reduce the nation’s carbon footprint, in line with the global quest to arrest global warming and climate change and in furtherance of the Decade of Gas programme.
    Identifying gas as a key driver of prosperity all over the world, he said the impact of the natural resource cannot be different in Nigeria.
    “The extensive industrial layouts in the Otta area of Ogun and Lagos States are anchored on the gas supply by the NNPC and its partners, which is creating jobs and other opportunities for the people.
    Managing Director of Nigeria Petroleum Development Company (NPDC), Mansur Sambo who doubled as the Chairman of the Gas Aggregator of Nigeria said the Forum was to sensitize users in Kano ahead of the completion of the AKK gas project.

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