Gas Fired Power Boiler Project in Nigeria

Gas fired power boiler project in Nigeria

NIAF is providing technical assistance to the Nigerian Government aimed at increasing power production from 24,000 GWH to 54,000GWH by the end of 2016. Much of this production will come through Independent Power Producers (IPPs) who have financed new gas fired power plants and will increase gas demand by 150%.

The gas to power potential of Nigeria

For the past 50 years, oil has been the big story in Nigeria. However, Nigeria’s gas reserves are far greater than its oil reserves. Gas has the potential to power Nigeria and its neighbours for the next 50 years, and it offers a relatively cheaper, more secure and cleaner way of generating energy. Gas fired boiler is so developed for a wider application in power generation industry.

How does the current system work?

The current gas market in Nigeria operates under the auspices of the NNPC (Nigeria’s national oil company) and its subsidiary the National Gas Company (NGC). The NGC allocates gas between the power sector, industrial sector and export sector. Despite several contractual agreements between the power sector and the NGC, the market still operates on the basis of unofficial agreements and relationships.

Currently, gas is allocated between the three sectors using an opaque method with no public accounting for the volume of gas allocated to each sector. As a result IPPs and the Ministry of Power are unable to predict the levels of gas for future use, and determine whether the gas delivered is in line with legal agreements which allocate a set amount of gas to the power sector. Furthermore, the price paid for gas is lower than contractually agreed or kept secret, and payments by the power sector are in arrears. The result of the existing arrangement is a shortage in the gas supplied to the power sector which will prove a substantial barrier in increasing production to 54,000GWH.