Indigenous Oil Firms Partner on Power Sector Reform

Indigenous Oil Firms Partner On Power Sector Reform

  • Saturday, 30 August 2014 16:22
  • Written by Daniel Anazia
  • TWO indigenous oil and gas exploration, development and production companies — Frontier Oil Limited and Seven Energy Limited — have concluded arrangements to offer what may be considered a significant solution courtesy of a strategic alliance that has resulted in the construction and commission of the N90 billion (US$600 million) Uquo JV Gas Processing Facility in Esit Eket, Akwa Ibom State.

The ultra-modern plant, which was built under the Uquo Joint Venture partnership between Frontier Oil Limited and Seven Energy Limited, is expected to boost power generation in the Nigeria with a capacity between 750 and 1,000 megawatts of electricity.

The plant commissioning, also marked the formal commencement of gas supply to the Ibom Power Company, and apart from supplying gas deliveries of about 560MW to Calabar National Integrated Power Project (NIPP) power station, the plant will supply gas to more than 10 per cent of Nigeria’s power generation capacity.

The facility, according to its promoters, is one of the biggest projects of its nature undertaken by independent indigenous partners in sub-Saharan Africa. The oil field was one of the 24 marginal fields that were awarded to indigenous companies by the Department of Petroleum Resources (DPR) in 2003 as part of the Federal Government marginal field programme (MFP), aimed at increasing reserves, production, employment, local content and indigenous participation in the upstream oil and gas business.

Though, Nigeria ranks prominent among developing countries that are challenged by perennial low electric power generation and distribution. As at August 9, the Federal Government put Nigeria’s electricity generation at 2,628.6 megawatts, reflecting a sharp drop from the little above 4,000MW, which government had recently announced as the country’s generated power.

According to the chief executive officer of Seven Energy, the JV partner that provided the technical services and 100 per cent of the funding for the gas facility, Philip Ihenacho, the US$600 million gas facility can do over 200 million cubic feet of gas per day and can produce almost 1,000MW of electric power.

He stated that the company is also building a pipeline that will supply gas from the facility to the 540MW NIPP plant in Calabar. “With these two trains, we will be able to power both the Ibom Power Plant as well as all of the gas needed for the Calabar NIPP for the next 20 years. We intend to expand as we get more customers and are able to access more gas in this area,” he declared.

President Jonathan, while commissioning the facility, commended the joint partners for their foresight and added that it was the beginning of a gas value chain that will open the country’s economy further and improve the lives of Nigerians. He added that it would also help Nigeria’s quest for sustainable power supply.

“We are happy with what we have seen today. Seven Energy and Frontier Oil deserve commendation for combining their individual capacities to deliver this project, which will have multiplier effect on the economy such as increasing national power output, employment opportunities for the host communities and Nigerians and additional revenue for both the Federal Government and Akwa Ibom State,” he said.

President Jonathan also applauded the project as a major step towards effective harnessing of the country’s gas resource, even as he assured that gas flaring in the country would become a thing of the past by 2020.

While restating the critical role of private sector in national economic development, he stressed the need for expanding our oil and gas resources to further create more employment opportunities for the youths.

He also expressed the hope that Nigeria could become the petrochemical hub for Africa, considering the huge investment and establishment of more plants in the country, and assured that government would continue to support the private sector participation to boost the nation’s economy.

The Minister of Power, Prof. Chinedu Nebo, had blamed severe leaks and low gas supply to some strategic power generation plants across the country especially in eastern Nigeria for the drop in generated electricity.

He added that by implication, Nigerians were expected to bear another gruesome experience of nationwide load shedding and attendant adverse impact on socio-economic activities.

On his part, Akwa Ibom State Governor, Godswill Akpabio, described the project as one of the gains of the right environment being provided by his administration for the private sector to operate.

He said the prevailing peace and business friendliness of the state endeared it to corporate organisations. “As you can see today, through our vision and partnership with these companies, we are achieving great things for both Nigeria and Akwa Ibom State,” he stated.

He added that the state government and its partners were leading the way in addressing Nigeria’s power problem through the production of natural gas, and assured Seven Energy and Frontier Oil of government’s continued support.

Aside, the project benefits also include the creation of hundreds of primary and secondary employments as well as socio-economic development of the host community among others.

The CEO of Frontier Oil Limited, the operators of the Uquo Joint Venture, Engr. Dada Thomas, said the commissioning of the gas facility was the beginning of a gas value chain that will affect the lives of Nigerians and boost the nation’s economy.

According to him, “with an added 1,000 megawatts of electricity to our national grid, our production capabilities are bound to expand, increasing the size and breath of our economy.”

“This means that the hairdresser can do her hairdressing, the welder can do his welding, and the factory can carry on production. It means that the people in the office can function because their computers will have power and all those things have an impact on the ability of each individual to produce optimally”, he added.

He further said that the plant was poised to offer efficient service delivery and unmatched quality gas supply which will, in turn, translate into efficient  power generation by the power companies using the gas from this facility.

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