Russia-Ukraine conflict puts pressure on Nigeria’s weak power sector as gas firms target premium buyers

NIGERIA’s quest for improved power supply is further constrained as international oil companies that produce and supply associated gas to power plants prioritise premium global markets as a result of Russia’s invasion of Ukraine.

Western nations alongside its allies placed sanctions on Russia’s gas following the invasion.

The priority on premium global markets would see Nigerian gas companies seek alternative markets, amidst debt of N1.64 trillion owed them by the Nigerian Bulk Electricity Trading Company (NBET).


READ ALSO:

Electricity tariffs: We met the mess Jonathan administration created in the power sector – Lai Mohammed

FG solar power project still struggling 5 years after in Kano, Lagos, Abia markets

Russia-Ukraine conflict: Biden, Blinken, Adeyemo among top US officials sanctioned by Putin

Melitopol mayor abducted by Russian troops -Ukraine officials

Soludo to pro-Biafra groups: It is time to interrogate your purpose


The debt has affected nationwide power supply as generation companies insist on a ‘pay as you go’ arrangement with the Federal Government.

“You know the current problem we are having with gas supply because of debts owed the generation companies. Most of the gas firms are now targeting premium buyers in Europe and other parts of the world because of the sanctions given Russia,” energy lawyer and power sector governance expert, Chuks Nwani told The ICIR.

He said: “Gas is business and has available markets. As the Nigerian government delays payment to gas companies, they ate taking steps in marketing to willing buyers abroad.”

Joy Ogaji, the Executive Secretary of the Association of Gas Generating Companies (APGC) also confirmed  the development to The ICIR.

She, however, noted that the Nigerian Bulk Electricity Trading Company (NBET) instructed them not to sell the ones contracted for delivery to power consumers.

“NBET says it has to be outside the contracted quantity. Quantities it refused to pay capacity on,” Ogaji said.

Recall, the Nigerian power sector has been experiencing a major downtime since the last two weeks.

Amidst drop in hydropower generation occasioned by dry season, Nigeria in dry season relies on 80 per cent contribution to its electricity supply from gas generating power plants.

The gas plants are powered by generation companies who are currently being owed by the government.




    The Nigerian Electricity Regulatory Commission (NERC) confirmed the drop in grid power from 5,300 megawatts in October 2021 to 4,350 megawatts in March 2022.

    Speaking on the developments, NERC’s Chairman Sanusi Garba disclosed on Wednesday that that the agency has held meetings with the Nigerian National Petroleum Company Limited (NNPC) to ramp up gas supply amid shortfalls.

    “Calabar in Cross River State has a generating plant owned by the Niger Delta Power Holding Company (NDPHC). We are expecting to ramp up supply to the tune of 500 megawatts of power. We have spoken to them,” Sanusi said.

    Sanusi also confirmed that the meeting with NNPC also has Shell in attendance to assist in ramping up power supply in the country.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here


    Support the ICIR

    We need your support to produce excellent journalism at all times.

    -Advertisement-

    Most read