Six power plants remain idle because of lack of gas to fuel their operations, Shell Petroleum Development Company (SPDC), has said.
Its Senior Commercial Adviser, Upstream Gas, Emmanuel Anyaeto, said the plants could not operate as there was no infrastructure to convey gas to their locations.
He spoke on the sidelines of ‘Gas Aggregation Buyers’ Forum’ orginised by the Gas Aggregation Company of Nigeria (GACN), in Abuja, yesterday.
He said gas producers were also reluctant to supply them gas owing to their rising debt profile which was almost hitting $500million.
He said Nigeria needed about two billion standard cubic feet of gas to meet its requirement for both domestic and power plants.
Anyaeto said: “The reason is because we have about six power plants in this country that are standing idle that are not getting gas. The reason why they are not getting gas, even though we are flaring 800million scuf per day is that we don’t have enough pipelines to deliver the gas to the power plants.
“That begs the question, why were the power plants built far away from where the gas is? he queried, pointing out that the that most of the producers are owed a lot of money. The producers are being owed close to $500million today.”
He said the power plants, are government owned, but since the government is not paying, the producers now require a guarantee that they woul be paid upon supply of gas.
This condition, Anyaeto said, is what the government is yet to fulfill that has culminated in the shortage of gas for the power plants.
He said the amount of investment needed to meet the two billion SCUF in Nigeria is about $6million for gas, pipelines and other infratsuture.
According to him, producers were readily available for the gas business, but the challenge was whether customers are available to pay for the gas.
Also speaking, GACN Managing Director, Morgan Okwoche, said the Gas Purchase Agreement (GPAs) that was signed was not effective because there was no security for the electricity generation companies (GenCos), that needs a back up, while the Nigerian Bulk Electricity Trading (NBET) was yet to come up with any security instrument.
He said the N701billion intervention from the Central Bank of Nigeria (CBN), was not was extended to the gas producers, stressing that GACN is in a position to certify any invoice dispute free.
He said GACN wrote to NBET and the Minister of Power to involve the company to help in disbursing the N701billion to avoid dispute in the future.