Geometric Power, NNPC , Others Sign Fresh Gas Supply Agreement
Geometric Power, Nigeria’s foremost indigenous independent power company, has signed a new agreement with the Nigerian National Petroleum Corporation (NNPC), Shell Petroleum Development Company (SPDC), Total and Agip, who are joint venture partners for the supply of 43 million standard cubic feet of gas per day (mscfd) to its 141 megawatt (MW) power plant in Aba, which will be scaled to 188MW.
The agreement, was midwifed by the by the Gas Aggregation Company of Nigeria (GACN), and its initialling witnessed by Dr. Tim Okon, who is a Special Adviser to the Minister of State for Petroleum, Dr Ibe Kachikwu.
The deal, according to officials of Geometric, was expected to push gas supply to the plant.
Geometric Power, which was founded by the former Minister of Power, Prof. Bart Nnaji, had actually signed in 2009, a gas supply agreement with the joint venture partners but the agreement lapsed on account of the controversial sale of the Aba ring fenced distribution network to the Enugu Disco during the privatisation of the 11 Discos in the country by the Goodluck Jonathan administration in 2013.
A statement from Geometric on the development, quoted Okon, to have said the agreement would help increase gas utilisation in Nigeria, as well as enhance the viability of gas commercial frameworks in the country.
Okon, said: “We need to promote market-driven projects as solutions to long-term solutions to Nigeria’s economic crisis.”
His comments followed that of the Chief Executive Officer (CEO) of GACN, Mr. Morgan Okwoche, who commended Geometric Power by for its resilience, and expressed optimism that the integrated power firm would help create industrial clusters with efficient electricity supply.
Also quoted in the statement was Ben Caven, a former executive director of the defunct National Electric Power Authority (NEPA) who explained that the establishment of the GACN to issues gas purchase orders to gas off-takers has made it necessary for Geometric to renegotiate its deal for gas supply to the independent power project in Aba.
Similarly, Nnaji, in his reaction to the development, expressed satisfaction with the joint venture partners over the agreement he described as a huge step forward in the effort to get the Aba power project to start commercial operations after years of disputes and litigation arising from the controversial federal government’s transfer of the ownership of the area which had in 2004 and 2005 been conceded to Geometric Power to another firm.
Accordingly, the 141MW power plant is embedded in a ring-fenced electricity district of Aba comprising nine out of 17 local government areas of Abia State and stretching over 4000 square kilometres.
The project was reported to have its own gas pipeline of 27 kilometers, starting from Owaza in Ukwa West local government area to the industrial estate of Osisioma, on the outskirts of Aba city.
Its electric distribution ring fence includes seven substations of 2x15MVA each and hundreds of kilometres of overhead lines at 33kV and 11kV networks along with other low voltage lines.
Also quoted in the statement to have reacted to the gas supply agreement was Mr. Mike Uzoigwe, a former chief executive of the Egbin power plant in Lagos, who explained that the new gas supply agreement, “is possible because of the structure of the project where the JV partners can see that the project is bankable and will be able to pay for the gas they supply at a commercial price reliably.”
Uzoigwe added that: “This structure will serve as a model for other gas-to-power projects in Nigeria since the various stakeholders can see how they will be able to recoup their investment in their projects.”