Oredola Adeola
The Nigerian government has taken a strategic step to address a critical gas supply shortage threatening the operation of electricity generation companies (GenCos) with the proposal before the National Assembly to settle domestic gas to power thermal plants in Naira, and to promote sustainable power production.
Adebayo Adelabu, Minister of Power, made this known in a statement obtained by Advisors Reports by on Thursday, on the sideline of the recent meeting held with Rt. Honourable Ekperikpe Ekpo, Minister of State Petroleum Resources (Gas).
The Minister emphasised that the meeting with the Minister of State for Petroleum Resources (Gas), was aimed at addressing the ongoing challenge of insufficient gas supply to GenCos.
He said, “Nigeria has significant gas reserves, but delivering enough gas to meet domestic demand has been a persistent issue. To tackle this, we’ve established a joint ministerial committee.
“It’s crucial to find innovative solutions for ensuring stable gas supply to the power sector.
“Proposing domestic gas payment in naira is a key step toward stability, aligning with our economy’s needs and promoting sustainable energy production,” the Power Minister stated.
Adelabu therefore noted that the payment shortfalls within the electricity sector pose risks to production and the entire value chain.
He said, “Leveraging my financial sector experience and contacts, I’m working with stakeholders to advocate for legislative measures mandating naira-denominated payments for domestic gas supply.
He further disclosed that the plan to address the vandalization of gas pipelines in the Niger Delta is also a priority.
According to him, “A 2021 NEITI report highlighted 7,143 cases of pipeline breakages and deliberate vandalism between 2017 – 2021, significantly impacting the efficiency of the electricity supply industry (NESI).”
Adelabu therefore emphasised that clear contractual arrangements between GenCos and gas suppliers are essential to ensure consistent supply and maximize our power generation capabilities.
He also revealed that the upcoming commissioning of the OB3 line is expected to greatly enhance gas supply to the northern region, fostering industrial growth.
The Power Minister further stated that the establishment of a joint ministerial committee to tackle the issue of inadequate gas supply to power generation companies (GENCOs) represents a crucial stride towards resolving challenges in Nigeria’s energy sector.
He said, “We are dedicated to assembling a team of experts for this committee, and upon its formation, we will publicly announce the timelines for our initiatives.”
