Nigeria News

NIGERIA: ‘Gas-to-Power Impaired by FG’s Poor Political Will, Structural Challenges’

Nigeria’s current challenges in her gas-to-power sector may continue unabated for as long as the federal government allegedly fails to exert its political weight on extant issues hampering adequate and sustainable supply of gas to upstream thermal power generation companies in the country, THISDAY has learnt.
Currently, Nigeria’s gas-to-power sector, which is described as a very critical part of her ongoing power sector reform, appears totally overwhelmed by various forms of challenges which experts in the country’s energy sector consider too significant to be ignored by the federal government.
One of the industry experts who worked under former President Olusegun Obasanjo’s administration and helped in designing Nigeria’s gas master plan that is being implemented by the ministry of petroleum resources, Mr. Dan Kunle, stated in an exclusive interview with THISDAY yesterday in Abuja that Nigeria’s power industry vis-à-vis, its gas-to-power sector will likely continue to experience challenges of low gas supply to power plants; pending when the government decides to de-bottleneck certain impediments to investment in the sector.
Kunle, who was also part of the technical team in the Bureau of Public Enterprises (BPE) that crafted the Electricity Power Sector Reforms (EPSR) Act 2005 amongst other reform documents in Nigeria’s energy sector, explained that the federal government appears uninterested in mustering adequate political will to address critical structural challenges in Nigeria’s gas-to-power sector.
Although, he described the privatisation of generation and distribution assets created from the unbundling of successor companies of defunct Power Holding Company of Nigeria (PHCN) as very germane to Nigeria’s industrialisation efforts, Kunle however stated that the government will have to follow up its privatisation of the upstream part of the power sector with a restructuring of Nigeria’s gas-to-power sector for a meaningful reform to be seen.
“The gas sector of Nigeria’s hydrocarbon industry is a very critical sector. Nigeria’s hydrocarbon industry dates back to 1956 but if you check properly, we had no law on mining gas; we have some regulations and bye-laws like the decree for Bonny LNG but no deliberate law for our gas resources in Nigeria and so gas was tied together with oil.
“All the mining leases for the hydrocarbon industry did not define gas but oil mining and since 2007 to date, we still have not succeeded in having a deliberate separation of gas from oil, we attempted it when President Obasanjo created the ministry of energy but President Yar’Adua came and said it should be oil, gas and power with three ministers, then himself being the super minister,” Kunle said.
While responding to a question on what could be the sectors’ major challenges, Kunle said: “Political will, deliberate funding for gas production and institutional framework that should be driving all these transactions are not properly coordinated; if these three things are right, the industry will not be like this.

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