Page 9 - AfrOil Week 34 2021

AfrOil PERFORMANCE AfrOil

The source urged Eni and the other international development might hinder NLNG’s expansion
oil companies (IOCs) that hold stakes in NLNG plans – namely, the Train 7 project. Disruptions
to make concessions for the sake of reducing the on this front “will be disastrous [for] credit rat-
“performance reputational risk” that the group ings and could impact on future financial syndi-
now faces in international markets. He did not cation for LNG project expansion,” he said.
recommend any particular solutions, but he said The NLNG consortium is the operator of
that the group might soon have no choice but to a gas liquefaction plant on Bonny Island. The
acquire LNG from third-party vendors in order facility has six operational production trains
to meet their supply commitments. capable of turning out a total of 22.5mn tonnes
If appropriate actions are not taken, he per year of LNG, and its capacity is set to rise to
added, the number of affected cargoes could rise 30mn tpy as a result of the Train 7 project. This
to 50 by the end of the year and customers may scheme envisions the construction of a seventh
start looking to other suppliers outside Nigeria. production train that can turn out 4.2mn tpy, as
Meanwhile, a market source pointed out that well as the debottlenecking of existing trains,
NLNG’s problems were “causing major supply which will add another 3.4mn tpy of capacity.
disruptions and a very high level of operational Equity in the consortium is divided between
inconsistencies, leading to unnecessary demur- state-owned Nigerian National Petroleum
rage exposures and penalties.” He added: “If Corp. (NNPC), with 49%; Royal Dutch Shell
things continue in this perception and complex- (UK/Netherlands), with 25.6%; TotalEnergies
ities set in, it won’t be surprising to see offtak- (France), with 15%, and Eni (Italy), with 10.4%.
ers demand performance guarantees for future The partners began production in 1999 and
lifting.” broke ground on the Train 7 project in June of
The market source went on to say that this this year. ™

POLICY
New report says PIB will help make more

gas available to Nigeria’s power sector

NIGERIA AFRICAN Energy, an independent research
association, has said that the newly adopted
Petroleum Industry Bill (PIB) is likely to make
more natural and associated gas available for
domestic thermal power plants (TPPs).
In a recently published report on the Nige-
rian power sector, African Energy noted that
the federal government’s efforts to promote gas-
fired electricity production were progressing
more slowly than expected. As a result, Nigeria Nigeria’s gas-fired TPPs need more fuel (File Photo)
is likely to see the installed capacity of gas-fired
TPPs reach 18,300 MW by 2025, but only 7,600 become the primary fuel for electricity produc-
MW, or less than half of total capacity, will be tion in Nigeria. “Gas supply will be crucial. Gas
available for generation. will continue to fuel Nigeria’s power sector for
This gap is already present and will grow many years to come, while oil continues to play
wider over the next few years because the coun- a key role in the country’s economy,” it said.
try’s gas supply systems are not adequate to meet The report also noted that Nigeria did not
demand, it explained. But it also stressed that have the generating capacity or the transmis-
conditions would improve in the long term as sion and distribution infrastructure needed to
the result of the government’s passage of the PIB. meet current demand for electricity. This could
“The passing of the Petroleum Industry Bill change if Abuja moves ahead with plans for
will provide much-needed clarity for the sector liberalising the energy industry by re-tender-
and could unlock new gas supply to the domes- ing of state-owned National Integrated Power
tic market, as will the construction of major Projects (NIPPs) and privatising Transmission
gas pipeline projects,” the research association Company of Nigeria (TCN), the national power
wrote. “Combined, these may break down provider, it said. It also drew attention to Abu-
some of the major barriers for new independent ja’s consideration of proposal for franchising
power plants (IPPs).” power distribution systems and for promoting
It went on to say that it expected gas to the development of mini-grids. ™

Week 34 25•August•2021 www. NEWSBASE .com P9