Chevron to build 750MW IPP in Lagos

2010-02-25
THE PUNCH Newspaper- Obinna Ezeobi


Chevron Nigeria has commenced the process of building a 750 megawatts independent power plant in Agura, a suburb of Ikorodu, Lagos State, the Managing Director, Mr. Andrew Fawthrop, said on Wednesday in Abuja.

Speaking at a media parley, Fawthrop explained that tenders for the project were sent out last week, adding that the IPP would be built in phases.

According to him, the cost of the IPP, which will be a joint venture with the Nigerian National Petroleum Corporation, will be worked out after the tenders have come back.

Shell Petroleum Development Company and Nigerian Agip Oil Company are the only international oil companies that currently own IPPs in Nigeria, while Exxon Mobil held the foundation laying ceremony of its 500MW IPP to be located in Akwa Ibom state two weeks ago.

On allegations that Chevron, like other IOCs was deliberately starving the Power Holding Company of Nigeria of gas, which was needed for power generation, the Chevron boss insisted that the company pushed out every metric cubic feet of gas that it could from its Escravos gas plant, especially as it was not a supplier to the Nigeria Liquefied Natural Gas in Bonny.

“Right now, all of our gas when the pipeline and infrastructure are available, goes into the domestic market,” he said.

Fawthrop further explained that the company resumed the delivery of gas to the Nigerian Gas Company on Monday after the Escravos-Warri pipeline, which has been out of operation since May 2009, was repaired.

He said, “That is an NGC line. They had been working on it for quite a while.

“There were 43 breaks on that line that had to be repaired, that is why it took them quite a while to bring it back into service.

“Yesterday, (Tuesday), we started pushing gas again into the line.

“The amount of gas we delivered today was larger and would continue to grow as pressure goes up on the line.”

He also said, “We have had flares-out projects since 1992. We currently have three very large projects over $1bn being constructed to deliver more gas. The Escravos Gas to Liquid Project 3A plant will come on line by the end of this quarter and that will push up the delivery of gas.

“After the 3A project, we will follow that with two more phases of investments in gas plants even as we continue to deliver more gas into the domestic market.”

The Chevron boss, however, stressed that Nigeria would only be electrified with a step-by-step approach.

According to him, the power sector will continue to grow in steps when industries that are dependent on the sector invest in it.

Fawthrop added, “For the economy to grow, for one per cent Gross Domestic Product growth, the energy consumption needs to go up by about 1.6 per cent. So when you start looking for 5-10 per cent of GDP, then the energy and power growth needs to be going up by 8-16 per cent. Those are factors that will develop lots of jobs and as soon as power grows, it will get more consistent.”

The MD also said that Chevron’s current daily oil production in Nigeria was below 590,000 barrels per day.

He said, “Our production in the Joint Venture is running now that the gas lines are back up, just under 350 barrels per day.

In the deep water, In, Agbami, we are running close to full capacity of 250 barrels per day. We are running at 240 barrels per day and we expect those numbers to stay fairly constant for the next one or two years.”

On the state of the Escravos Gas to Liquid Project, Fawthrop stated that over 5000 people were working at the project and most of them hailed from the Niger Delta region.

He added that the company had already spent more than $1bn on EGTL project in Nigeria and was continuing to spend more locally in Nigeria.

“We will continue on that plan until we finish about 18 months from now and at that point, we will have the first gas to liquid plant in Nigeria and it will be the largest in Africa,” he added.

 

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