The multi-million dollars gas supply contracts to 504 Mega Watt (MW) capacity Alaoji power plant along the Imo River in Abia State has worsened the cold war between French major oil firm, Total and a consortium of indigenous firms, Frontier energy/ Seven energy.
Frontier/Seven Energy partnership was given a one year emergency contract to supply the gas to Alaoji Power Plant after Total, which has a domestic supply obligation to supply gas to the plant had been unable to do so. Checks by New Telegraph revealed that despite the expiration of the oneyear emergency contract last July, the local firm made attempts to claw back the contracts.
Managing Director of Frontier Oil, an indigenous gas development firm, Dada Thomas, confirmed that he wished Frontier was allowed to continue supplying gas to the same power plant, a declaration perceived as betrayal by Total.
A source at the Niger Delta Power Holding Company (NDPHC), owner of the NIPP, told this newspaper that Frontier went a step further by instituting lobbying to extend the lifespan of the contract.
“The contract has a one year life span and six months before its July 2016 expiration date, Total has completed the pipeline for gas delivery to the NIPP plant. But trouble started when the Frontier consortium indicated interest to continue. “We believed that the matter should have died down but we were wrong.
There is a cold war between the two companies over this contract, which may affect others,” he said. Confirming moves to extend the contract, Mr. Thomas, Africa oil+gas reportedly said that his company had made representation to the government that they be allowed to continue the supply.
Managing Director of Total in Nigeria, Nicolas Terraz, however, said that his company had not let go of the contract and was ready to commence delivery of gas through its Northern Option Pipeline (NOPL) to Alaoji power plant in the east of Nigeria and improve electricity supply in the country.
He told a group of parliamentarians in Lagos last July that the delivery of gas to Alaoji in Aba (Abia State) was among Total’s huge bouquet of projects that are aimed at contributing to the socio-economic development of the country. The 504MW combined cycle Alaoji Gas Power Station was inaugurated in March 2015, but it doesn’t supply more than 200MW of electricity.
Total Exploration and Production (E&P) had earlier announced it had completed the construction of a section of its Northern Option Pipeline, NOPL from Kilometre 38 at Obigbo in Rivers State, to Kilometre 50 at Imo River. The project is expected to help the Federal Government realise its aspiration of adequate supply of gas to the power plants to facilitate improved electricity supply.
“This milestone will help bring to reality the Federal Government’s aspiration of improved electric power supply in Nigeria,” the document stated.
“It demonstrates Total’s commitment to meeting its promises to deliver Better Energy.” The NOPL is a 24-inch wide, 50 km long pipeline system under construction by Total E&P Nigeria Limited on behalf of the Nigerian National Petroleum, NNPC/TEPNG Joint Venture. The project has the capacity to deliver about 100 million cubic feet of gas per day to Alaoji power plant. Inadequate gas supply to the newly built power plants has been an excuse the Federal Government has always given for the poor electricity in the country in recent times.
To ensure early gas supply to power plants, the Federal Government had requested the multinational oil companies, including Total E&P Nigeria, to complete various gas supply projects to resolve the situation. The section of the pipeline where the line connects to Nigeria Gas Company, NGC, facilities is vital for conveying gas to the Alaoji Power Plant.
Total Nigeria said this intervention for early gas required the mobilisation of additional resources to fast-track the works in order to meet the deadline despite numerous changes associated with the difficult terrain.
The gas now being supplied to the Alaoji power plant during the interim period, the company said, would come from Seven Energy, while NGC would transport the gas through their pipeline and the section of the NOPL Nigeria emerged the seventh most endowed gas nation in the world and number one in Africa, with 188 trillion standard cubic feet (scuf) of gas resources.
The nation could have been immune from the plummeting crude oil business if strategies focus had been made on this strategic option.