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APGC calls on NNPC to supply gas to gencos

AFRICA THE Association of Power Generation Com- cannot meet suppliers’ demands for “securitisa-
panies (APGC), a Nigerian industry associa- tion” – that is, some form of security – before
tion, has urged state-owned Nigerian National committing to a delivery deal.
Petroleum Corp. (NNPC) to assume respon- Prior to privatisation, TPPs expected to
sibility for supplying fuel to natural-gas fired receive such security from Nigeria Bulk Elec-
thermal power plants (TPPs). Joy Ogaji, APGC’s tricity Trader (NBET), the manager and admin-
executive secretary, said at a recent industry istrator of the domestic electric power pool, in
conference that the country’s power generation the form of bankable commercial letters of credit
companies, known as gencos, had not been able issued by a commercial bank, she said. So far,
to ramp up electricity production as rapidly as though, NBET has not provided the necessary
anticipated since they were privatised in 2013. letters of credit since 2013. “[The] way the power
One of the factors underlying the problem is sector is designed is such that a value chain is as
that TPPs have not been able to secure gas sup- strong as its weakest link. So, it is designed such
plies that match their capacity, she said. that we have a bulk trader, NBET, as a securitisa-
Citing data from the National Control Centre tion agent or an obligor or a buffer for the gen-
(NCC), which is responsible for grid operations, cos,” she said. “So NBET is expected to provide a
monitoring and control of Nigeria’s transmission securitisation in the form of a bankable commer-
grid, she noted gas-fired TPPs had only received cial letter of credit from a commercial bank to the
13% of the fuel they needed to operate at their gencos, [which] in turn will now post it to the gas
full projected capacity of 28,000 MW. suppliers. As you all know, we have not received
She called on NNPC to cover the deficit, say- that, and this is why we are not able to post it to
ing it was in a position to meet this need since it the gas suppliers.” She also argued that problems
had a 50% equity stake in the joint ventures that with gas supplies had hampered efforts to imple-
are supposed to supply the gas to the power sta- ment the government’s plans for expanding gas-
tions. “My proposition is [that] we want NNPC, fired power generation. The Nigerian Electricity
[which] has 50% of the JVs, to take up the gas Regulatory Commission (NERC) has issued 160
obligation of the generation companies, and we operating licences to power producers, but so far
will generate as much megawatts as you want,” only 25 of these are operational, she said. Most
she remarked. of these idle licences are held by TPP operators
Currently, Ogaji said, the gencos often have a that might have added up to 30,000 MW of addi-
difficult time securing adequate gas because they tional generating capacity, she added.™

Minister reports on Egypt’s gasification

AFRICA EGYPTIAN Petroleum Minister Tarek El-Molla authorities have already installed 385,000 pre-
noted earlier this week that the government’s paid gas meters and intend to install more in the
domestic gasification programme was making future, he stated.
progress. In a statement issued by the state infor-
mation agency, El-Molla reported that the Petro- Rural gasification
leum Ministry had begun supplying natural gas He was speaking shortly after the Petroleum
to another 1.2mn households during Fiscal Ministry reported on the progress of a three-
Year 2020-2021, which ended on June 30. This phase plan to lay 16,000 km of pipelines to
brought the total number of residential units facilitate gas deliveries to more than 1,000 rural
consuming gas up to 12.32mn, he said. villages that are home to 4mn people.
He also noted that the geographical range The ministry indicated that it was already at
of the gasification programme was expanding. work on the first phase, which involves bring-
Some 88 areas within 18 governorates started ing gas to 199 villages at a cost of EGP3.3bn
receiving gas for the first time in FY 2020-2021, ($210.6mn). The second phase of work will
he stated. El-Molla went on to say that the Petro- involve the gasification of another 423 villages
leum Ministry intended to continue bringing at a cost of EGP5.5bn ($351mn), while the third
gas supplies to larger numbers of people in the phase will bring gas to another 710 villages at a
current fiscal year. cost of EGP16bn ($1.021bn), it added.
This is in line with directives issued by Presi- The ministry is carrying out this three-phase
dent Abdel Fattah El-Sisi, who is determined to plan within the framework of the Egyptian gov-
provide Egyptian citizens with better services ernment’s Decent Life programme. This initi-
and mitigate their hardships, he reported. ative targets 4,670 rural villages that are home
Additionally, he said, the ministry aims to to 57% of the country’s population, and it aims
expand the use of pre-paid meters in order to to improve infrastructure, public facilities and
facilitate the collection of payments. Egyptian vocational services in these communities.™

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