Repairs have been completed on the Escravos-Lagos Pipeline (ELP) which supplies gas to power plants, four days after it was shut down.
The situation promises to restore production activities at manufacturing companies where gas serves mainly as source of energy.
The Nigerian National Petroleum Corporation (NNPC) said on Monday that it has ensured return of gas supply to the power plants following directive from Maikanti Baru, group managing director of the corporation that the Nigerian Gas Processing and Transportation Company Ltd (NGPTC) carry out an assessment of the damage with a view to getting a prompt solution.
Manufacturers and the business community say the immediate supply of gas will cut energy and production cost.
Micheal Ola Adebayo, chairman of Manufacturers Association of Nigeria (MAN) Gas Users Group, confirmed to BusinessDay that gas is now available, which ultimately means smoother and uninterrupted production activities.
“This is a good development and will take all workers back to the factory,” Adebayo said.
“We had to resort to our generators when the Escravos fire occurred, but we have gas now and we commend government for the quick intervention. Our factories will be back to normal,” he said.
Ibrahim Usman, chairman of MAN Power Development Company, told BusinessDay that availability of gas will cut production cost as energy remains the biggest challenge facing manufacturers.
Usman said most of the heavy industries such as iron and steel were hard hit by lack of gas, adding that the situation forced manufacturers to devise ways of dealing with the situation.
“The immediate impact of this will be seen in the cost of production,” Usman said.
A chemicals maker Ikechukwu Ibeabuchi said availability of gas saves manufacturers the cost of re-calibrating their power plants.
“When there is no gas, manufacturers use Low-Pour Fuel Oil (LPFO). It is not easy to immediately resort to LPFO if your power plant is gas. You can build a coal plant but it also involves a lot of cost. So, when you don’t have gas, you suspend production or resort to a more expensive energy source. This is something availability of gas prevents,” the manufacturer, Ibeabuchi said.
Nigerian manufacturers spent N129.95 billion on alternative energy sources in 2016 against N58.82 billion recorded in 2015.
The 2016 figure represents 121 percent jump from that of 2015.
About 30 to 40 percent of manufacturers’ expenditure is spent on alternative energy sources such as fuel, diesel, gas, low-pour fuel oil, coal and inverters as they grapple with incessant power disruptions which cripples production activities.
A section of the ELP at Abakila in Ondo State blew up in flames on January 2, 2018, as a result of bush fire.
The incident affected gas supply to customers in Ondo, Ogun and Lagos States with subsequent shutdown of a number of power plants.
With the restoration of the ELP and resumption of gas supply, the affected power plants with a combined generating capacity of 1,143MW would resume power generation.
The power plants include: Egbin Power Plant in Lagos State; Olorunshogo Power Plant, PEL Olorunshogo and Paras Power Plant in Ogun State; and Omotosho Power Plant in Ondo State.
The 36-inch Escravos to Lagos Pipeline System (ELPS) is a natural gas pipeline built in 1989 to supply gas from Escravos in the Niger Delta to various consumption utilization areas.
It supplies gas to power plants in the South-west and also feeds the West African Gas Pipeline System.
Olusola Bello & ODINAKA ANUDU
