President Muhammadu Buhari has called for a speedy repair of the strategic terminal operated by Shell, and the activation of an alternative process to ameliorate the gas supply deficit.
Spokesman for the Vice President, Mr. Laolu Akande, said in a statement on Sunday that the government is “concerned about both the loss of gas supply to power plants in the country and significant loss of potential revenue arising from the damaged Forcados Export Terminal”.
Mr. Akande quoted Mr. Osinbajo as speaking on behalf of President Buhati over the weekend when he visited the Forcados Terminal in Delta State.
Professor Osinbajo, accompanied by Governor Ifeanyi Okowa of Delta, said President Muhammadu Buhari is concerned about the damage done to the terminal in February and had asked him to visit and assess the situation which has been responsible for the recent drop in electricity supply in the country.
He said the president is equally concerned that the gas projects under the disposal of Shell meant to beef up domestic supply of gas in the country are too slow.
Mr. Osinbajo met on Friday with top officials of Shell, the company that runs the terminal, and senior NNPC officials.
“What is going on here affects the Nigerian people and the economy,” Mr. Odinbajo said, referring to the loss of gas supply to power plants and the loss of potential foreign exchange earning arising from the inability to produce over 250,000 barrels of oil per day, due to the damage done to the terminal.
“The damage done to Forcados affects our oil earnings but also as important is the power aspect. It (Forcados) is a major source of gas, about 40% of our gas supply is affected leading to the problem of power supply in the country,” the Vice President told Shell officials led by Country Chairperson, Mr. Osagie Okunbor and NNPC officials led by Mr. Bello Rabiu, the Chief Operating Officer for Upstream.
Mr. Osinbajo said some months ago, power supply in the country had peaked at an unprecedented 5000MV, but now has dropped significantly including instances of system collapses, showing that this is “a real problem.”
According to him, “I came here on the instruction of the President who is concerned about the damage done to Forcados. I came here to see for myself and underscore the great implication for the nation’s economy. Many people don’t even know that power supply is hampered by what is going on here.”
While expressing gladness at the seriousness of purpose he observed from the plans drawn up by Shell and NNPC, the Vice President asked Shell to do “whatever else can be done and do it as expeditiously as possible,” to repair the damaged terminal.
A repair plan presented to the Vice President during the visit by Shell indicated that the repair work which is in three phases is about concluding its first phase with expectation that the repair would be concluded in May.
Meanwhile, NNPC also presented an interim alternative plan to supply gas to the plants including trucking condensate.
He expressed the concern of the federal government that IOCs that seat on 80% of gas deposits in the country have not been as forthcoming regarding gas supply to the domestic market.
“Even if it is as a matter of public service,” Prof Osinbajo encouraged the IOCs to do a lot more for domestic gas supply considering the gas supply problems in the country, stressing that “we are clearly suffering in terms of domestic supply.”
For instance, he cited the need for Shell to speedily complete the Bonga and Forcados/Yokri gas projects in order to assuage the plight of the Nigerian people.
According to him, “the president is particularly concerned about this outstanding gas projects.”
The Bonga Gas Diversion project would provide 120mmscf/d when completed by the second quarter of this year, while the Forcados/Yokri gas project would provide 80mmscf/d at completion expected at the same timeline. There is also the Assa North/Ohaji South project which can also provide 500mmscf/d.
Experts say currently, gas production into domestic network in the country has fallen to 601mmscf/d from usual 1.1bcf/d. The implication is that the country is now loosing about half a billion cf/d, which roughly accounts for about 2000MW of electricity.
Speaking after a chopper flight over the terminal and a briefing session on efforts to repair the damage by
top Shell and NNPC officials, the Vice President later told reporters that “the damage done to Forcados terminal is the chief reason for the poor power supply that has affected the country recently.”
Prof. Osinbajo, also disclosed that pipeline vandalism which damaged the Forcados Terminal has led to low supply of gas, meaning most of the power plants are not functioning to maximum capacity.
“We went to Forcados to see for ourselves the sabotage done to our pipelines. The damage done has led to low supply of gas and most of the power plants are not functioning to maximum capacity'” the VP stated.
Addressing journalists after inspection of the extent of damage caused by vandalism at the Forcados in Brutu local Government Area of Delta State, Vice President Osinbajo was however optimistic, saying “We have seen the alternative steps that the NNPC is taking in order to ameloriate the damage that has been done and the problem associated with getting gas from that terminal to all of our plants.”
He disclosed further that “there are efforts being made by the federal and state governments as well as communities to tackle current vandalism challenges”, adding that government is also looking beyond the present situation into what can be done in the future.
One of the future steps the Buhari’s administration could take to forestall the perpetration of vandalism, according to Prof. Osinbajo, is to establish “a permanent pipeline security force.” He said such a force if formed “would be armed with sophisticated weapons to ensure we contain the vandalism, and overhaul security.” He said a permanent pipeline security force is an option to look at.
Also commenting on the issue, the Delta State Governor, Ifeanyi Akowa, who accompanied the Vice President all through the visit lamented that “the Forcados terminal is important to Delta state and the nation. That is where SPDC evacuates its products, and other land operations including Seplat evacuating products from there for sale. Now, all the production on land by SPDC is shortened.”