Page 4 - AfrElec Week 26

AfrElec COMMENTARY AfrElec

Nigerian pipeline progress

vital for power generation

Nigeria’s gas-to-power programme hinges on the success of
pipeline projects, which have a mixed record

NIGERIA NIGERIA’S government has declared 2020 to be company was trying to bore an open-hole tunnel
the “Year of Gas” – that is, a year in which the with a diameter of 62 inches (1,575 mm) for the
WHAT: country takes full advantage of its ample natural pipe at a depth of 40 metres below the riverbed.
The OB3 pipeline project and associated gas resources. As part of that ini- So far, he said, horizontal drilling has been very
has encountered further tiative, it is promoting domestic consumption of difficult because the planned route of the line
delays, while work on the natural gas. is made up of many different soil formations,
AKK pipeline should start To be sure, Abuja has already scored some including layers of sand, clay and gravel.
soon successes on this front, especially in the area of These difficulties have arisen, he explained,
power generation. According to the Interna- because there are no companies in Nigeria that
WHY: tional Energy Agency (IEA), gas-burning ther- have the right type of horizontal directional drill-
Both links will deliver gas mal power plants (TPPs) accounted for no less ing (HDD) equipment to perform this task. As a
to TPPs than 80% of the country’s electricity production result, he noted, Nestoil is looking for a foreign
as of 2019. company that can provide a direct pipe facility.
WHAT NEXT: Nevertheless, the government is backing It has held discussions with HDD Thailand and
Abuja has tasked efforts to build more gas-fired TPPs – and it will hopes to strike a deal with the Thai company
a committee with need more gas to feed them. And to supply the soon, he said.
submitting a report on plants with gas, it will need pipelines. Bringing the equipment into Nigeria may Nigeria’s
domestic gas pricing So far, its record on pipeline construc- take some time because of the travel restrictions
within 30 days tion has been mixed, as recent developments arising from the coronavirus (COVID-19) pan- government
demonstrate. demic, he added. has been urged
OB3 pipeline delayed
One of the pipelines that is being built to Downstream consequences to support the
deliver gas to power stations is the Obiafu- The postponement of the pipeline’s completion
Obrikom-Oben (OB3) link. date represents a setback for the government’s AKK project by
Nigerian National Petroleum Corp. (NNPC) gas-to-power programme. The OB3 link was
had originally hoped to bring this conduit on designed to pump stranded gas from east to developing a new
stream in 2017 but has fallen far behind sched- west across the Niger River Delta region, thereby domestic gas
ule. Last week, it pushed the target date for com- ensuring regular deliveries of feedstock to TPPs
pletion back once again, citing the technical in the western part of the region. tariff regime
difficulties encountered by Nestoil, one of its The delays will also affect Seplat Petroleum,
contractors. a local upstream operator that has been hoping
NNPC had originally tasked Nestoil, a Nige- to use the pipe to deliver gas to the 459-MW
rian engineering, procurement, construction Azura Edo TPP. Seplat made a final investment
and commissioning (EPCC) company, and decision (FID) on the Anoh project and struck
Oilserv, another Nigerian service provider, with a take-or-pay supply deal with the Azura-Edo
building OB3. As noted above, the two contrac- station last year on the basis of expectations that
tors were originally due to finish the link three the pipeline would be ready.
years ago but proceeded more slowly than antic- These problems are reflective of a general
ipated. Oilserv completed its section of the pipe- slowdown in the gas-to-power programme.
line in 2019, but Nestoil is now on track to wrap Officials in Abuja had said several years ago that
up work in December 2020 or the first quarter of they wanted to add at least 10,000 MW of new
2021, Business Day reported last week. gas-fired generating capacity between 2015 and
2020. In turn, this initiative was supposed to
Equipment problems support a wider effort to bring the country’s total
According to Chukweluoka Umeh, Nestoil’s generating capacity up to 40,000 MW, more than
executive director, the latest delays stem from the double the current level, during the same period.
construction of the 1.9-km section of the pipe So far, though, work has not proceeded at the
that will cross the Niger River. anticipated speed. Nigeria will not meet its tar-
Business Day quoted Umeh as saying that his gets this year.

P4 www. NEWSBASE .com Week 26 02•July•2020