SUNDAY MUSINGS: The Case for an Energy Emergency in Nigeria, Again – by Bolaji Aluko

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SUNDAY MUSINGS: The Case for an Energy Emergency in Nigeria – Again




Mobolaji E. Aluko, PhD

June 7, 2015



This is an essay where  by energy, we mean electric power, oil (petroleum and its products) and gas; where we write about diversifying the sources of fossils and renewables to power (to include nuclear energy), regionalizing their choices, increasing the number of gas and power plants and their interconnecting pipe- and power-lines, but distributing/embedding  them as a matter of policy;  upgrading single-cycle to complex-cycle gas technology,  but in general downsizing their average capacity of power plants; protecting pipelines and power lines via trained security personnel and appropriate technology; where we recommend increasing grid power-line voltages to 440/726 KV for reduced line losses; where we call for early passage of legislation and credible enforcement of cost effective pricing for gas and electricity to ensure reliable affordable and profitable availability of gas and power; and where we call for a break-up of a long-standing cabal of energy technocrats and businessmen in and out of government, and a removal of political patronage of oil block allocations.


(By Prof. Bolaji Aluko)



1 Energy for Development 1 Residential customers
2 Energy for Qualitative Living 2 Institutional customers
3 Commercial customers
4 Industrial customers
5 Transportation & Telecommunications
6 Street Lighting & Signaling
7 Citizens-at-large



1 Federal Ministry of Power; Petroleum Resources 1 Infrastructure (for distributed/embedded generation, transmission and distribution) – adequacy, protection and maintenance
2 State Ministries of Energy, Power 2 Non-Renewable sources (coal, natural gas, petroleum, nuclear, oil shale (bitumen)) vs. renewables biomass/biofuels/biodiesel, hydro, solar, wind, hydrogen)
3 NERC, PHDC, DISCOS, GENCOS, Transco, SO,  DPR, NNPC, NPDC Direct-current transmission   vs. Alternating-Current/higher voltage transmission
4 IOCS, Indigenous companies, IPPs 3 Availability, accessibility, reliability, pricing, affordability and commercial sustainability
5 Energy Boards 4 Legislation
6 Other Ministries, Departments & Agencies 5 Bureaucracy
7 Professional Energy Bodies (Including Staff Unions) – PENGASSAN, NUPENG, NUEE,



International Standards & Markets




Electrical energy is the most mobile and versatile form of energy.  It is directly needed to run our home and industrial appliances and machinery,  light, heat and cool our living and work spaces, and for our telecommunications and transportation.  Other forms of energy sources (coal, oil and gas) are also needed to be used to generate electricity in the first instance, but also by themselves to run our transportation industry, to directly provide heating and cooling wherever needed, as well as to be chemically processed into other goods and necessities of life.  Their collective good quality and quantity are absolutely essential for national economic and technological development.

Nigeria has an abundance of all of these energy resources, but until and unless we get all their demand, generation, transmission and distribution/marketing matrix right – all of which should be part of a comprehensive energy policy for the nation – no amount of effort in attracting foreign direct investment into the country will yield the kind of positive results that we want.

Back in January 2008, I wrote a piece with the same title as the present one, sans “Again”, as can be found in

Today, more than seven years later, the need for an Emergency Declaration is even more acute than ever, particularly in these first days of a nouveau regime of Change, when the country is being hit by an agonizing trifecta of electricity-less-ness, petrol+gas-less-ness and cash-less-ness.

This essay x-rays the first two of this trifecta, starting with a startling confessionary disclosure, and proffers some suggestions



In a disclosure reported widely in Nigeria’s dailies on June 1, 2015,  the immediate past Minister of Power, my colleague and ex-VC Prof. Chinedu Nebo lamented, inter-alia:


Nebo alleged at a post-service assessment interview in Abuja on Sunday that plans of the immediate past government to generate over 5000 megawatts (MW) of electricity in 2014 and subsequently add more capacity were effectively bungled by the hypocritical approach to meeting the demands of gas power plants by gas producers in the country.

He explained that whereas the country produced up to five billion standard cubic feets (bscf) of gas per day, producers preferred to export about four billion standard cubic feet of that and dedicate one billion standard cubic feet for the domestic market, out of which over 60 per cent of it are mostly channeled to industrial users.

The former minister noted that consistently, demands for improved gas supply to the power sector were ignored by producers who opted to satisfy industrial consumers and often cited legacy debts owed to them by defunct Power Holding Company of Nigeria (PHCN).

He also stated that the situation did not improve despite the joint intervention of the Nigerian Electricity Regulatory Commission (NERC) and Central Bank of Nigeria (CBN), in which price and transportation of gas to power were reviewed to $2.80 (per mmBtu) and CBN commitment to offset the legacy debt.

“I hate excuses. But I would say that commitments were made to give us gas, but we haven’t seen gas. It is just as simple as that.

“It is very painful. I blame a lot on vandalism, but I also blame the oil companies for what I consider to be hypocrisy. They have been hypocritical with this whole issue of making sure that we have gas and bringing us out of darkness and so on,” Nebo said.

He further stated: “These turbines are ready to go. Some of them are operating at 30 per cent capacity. In a place where you have three to four turbines and only one is at work because there is no gas supply.”

“I think I feel so sad about this because if we had gas going to these turbines, every Nigerian would have been hailing President Jonathan today. But unfortunately, there was no gas.

When gas was produced, even more, you find a preference by the oil companies to give gas to the industries instead of to power generation. It is still happening today, whereas the profile for gas to power continues decreasing, the profile of gas to industries is on the  increase. Something is wrong,” he added.

According to him: “I think that it is scandalous that we produce over 5bscfs of gas every day and we sell 4bscfs and retain only 1bscfs for local use. And that the one for local use is preferentially given to industries and not to power, starving the power sector of the needed gas to industrialise this country and I think that is a shame.”


These are pretty damning disclosures, and a revision of the narrative that it was vandalism that caused most of the lack of gas that resulted in power shortage.

Please come with us…



First, some energy arithmetic about gas-to-power projects and what the above disclosures state or leave un-stated:

(1)   Nigeria has a known gas reserve of about 190 Trillion Cubic Feet Tcf (equal to 190,000 bcf, billion cubic feet), which is about 33 billion barrels of oil equivalent (boe) of reserve, with a reserve potential of 600 Tcf.  Nigeria has a current 5 bcf per day (bcfd) of gas production.   At that rate, we would be producing gas for the next 100 years, if we were not flaring off about 2.0 – 2.5 bcfd of its associated gas. About 100Tcf of the reserve is Associated Gas, and 90 Tcf Non-Associated Gas, and it is mostly the associated gas that is currently either being flared, or processed for commercial production, or re-injected. [Note that 1 Tcf = 1000 bcf = 1,000,000 MMcf.]

(2)  Nigeria also has 37 billion barrels of crude oil reserves, 2.7 billion tonnes of coal and lignite (which is 5.4 (lignite) – 13 (coal) billion boe) and 31 billion barrels of oil equivalent (boe) of tar sands.  These are all viable alternative sources of energy to gas.

(3)  1 million standard cubic feet per day (MMscfd) of gas is needed to produce about 3.5 MW of power using traditional Open-Cycle Gas Turbine (OCGT) [equivalent to Single-Cycle Gas Turbine (SCGT)] technology], and about 6 MW for CCGT (Complex Cycle Gas Turbine) technology. [See Figure 1 for a diagram of a CCGT technology.]  Put in another way, every bcf of gas can generate 80 – 150 GWh of energy, depending on the technology deployed.  Additionally, Nigeria has the potential to deliver 14-17 GW of electricity by hydroelectric means, and is blessed with solar insolation of 4 – 6.5 kWh/sq. m/day (40-65 MWh/sq. km/day; see Fig. 14).  With a land mass area of 923,768 sq. km, it means that about 36-60 Terawatts-hr (TWh)  of sunlight energy streams into Nigeria daily, only a small fraction of which is needed for conversion into electricity to meet the nation’s current estimated daily peak demand of 12 GW.

(4)   If ALL the 5,ooo MMscf of gas produced in Nigeria every day were devoted to just power, that would create 16,500 MW (or 16.5 GW) from efficiently-run SCGT power plants and 30,000 MW (30 GW) from CCGT power plants.  This would be more than sufficient for the present peak demand of 12 GW, but far less than the 40 GW aimed for in the nation’s Vision 2020 national document, or the 120 GW needed if Nigeria were to have the same per capita power capacity as (say) South Africa. [See Figure 2 for comparison of different countries’ capacities in GW and per capita.]

(5)  Currently, according to Professor Nebo, 80% (or 4 bcfd) of this domestic production is exported for the profitable LNG foreign market, while 60% of the remainder (that is, 0.6 bcfd) is given to the non-power sector, leaving just 400 MMcfd (or less than ten percent of total daily national gas production) for the power sector.  This can produce only maximum of 1,320 MW (1.32 GW) from SCGT technology to 2,400MW (2.4 GW) from CCGT power plants, with the rest having to be made up from hydro sources.  Each metric ton of LNG is obtained from compressing about 48,700 cubic feet of natural gas – i.e. one produces 7.5 Mtpa LNG/bcfd of natural gas or requires 133 MMscfd/Mtpa. [See Figures 3, 4 and 13 for the possible uses of gas in Nigeria, with indication of capital costs and job creation, and Figure 5 for a graph showing peak values of total power production in 2014 in Nigeria.] See also

(6)  Of the twenty-three (23) power plants in the country with a total nameplate of 10,644 MW (10.6 GW), three are hydroelectric (15% of total nameplate capacity), and the rest (85% of total nameplate capacity) are thermal.  Of the twenty thermal plants, one (1) is a steam plant only (10% nameplate capacity), one (1) is combined steam and SCGT (each separate, 8%), three (3) are CCGT (17% of total nameplate capacity) while the remaining fifteen (15) are SCGT (about 50%).  [See Figure 6 for a graph of the capacities and generations of power plants, and Figure 7 for their geographical disposition.] Last week, according to the following report, eighteen of these plants were shut down, with only 737 MW (roughly equivalent to availability of 210 MMcf/d if all were SCGT power generators) being generated country-wide – the lowest in recent history


The Federal Government had on Monday announced that 18 electricity generation plants out of the 23 across the country were not generating power, adding that the country lost over 2,000 megawatts of electricity as a result of the development.

It attributed the cause of this to pipeline vandalism and the industrial action embarked upon by oil and gas workers.

The Nigerian National Electricity Commission had stated, “This bad supply condition has worsened in the last few days. At present, 18 out of the 23 power plants in the country are unable to generate electricity due to shortage of gas supply to the thermal plants, with one of the hydro stations faced with water management issue.

“This has led to the loss of over 2,000MW in the national grid. This situation is further compounded by the recent industrial action embarked upon by workers in the oil and gas industry, a development which is taking a toll on other sectors of the economy. Gas supplies to the thermal plants have been further constrained by the industrial actions of workers in the oil and gas industry.”

Nebo, also on Monday, stated that the strike resulted in the shutdown of major gas plants, including Utorogu, Chevron Oredo and Oben in the western axis.

The ex-minister said the Ughelli and CNL Escravos plants were all isolated, adding that the shutdown of Shell Gas, Alakiri, on the eastern axis, had caused several power plants to become stranded.

Other power plants that were shutdown, according to Nebo, are Egbin, Olorunshogo I and II, Geregu I and II, Ihonvor and Sapele NIPP on the eastern end.


(7)  Consequently, we come to a firm conclusion that unfavorable pricing and infrastructure challenges in getting gas to power are the main crippling factors at work here, not necessary vandalism as has been constantly hankered upon. [See Figure 8 for the traditional differential pricing of gas;  Figures 9-11 for an indication of the infrastructural challenges in getting gas to various power plants in the country relative to LNG outlets, and Figure 12 for 2013 vandalism events in Nigeria.]  It appears that $2.0 and above per MMbtu of gas (approximately $2.0-4.0 per Mcf; 1000 scf (= 1 Mcf) of gas is approximately equal to 1 MMBtu of energy) seems to be the magical range for attracting profitability for gas producers.



The solution has to be discussed in five parts;

(1)    Gas infrastructure development, protection and pricing

(2)   Power infrastructure development, protection and pricing

(3)   Crude oil/Petroleum Product infrastructure development, protection and pricing

(4)   Politics and Bureaucracy

(5)    Legislation

Gas infrastructure development, protection and pricing

As already indicated above, if Nigeria is to have the same per capita power capacity as (say) South Africa, we would need to generate 120,000 MW of electricity.  If 80% of this is to be driven by gas, then 100,000 MW of power requires at least about 30 bcf/day of gas of DELIVERY for electricity, not just total production.  That figure is six times the present TOTAL production rate of 5 bcf/day.  That means that we must be prepared to produce 300 bcf/day of gas if (as of today) only 10% of gas production is to be devoted to electricity – which amounts to almost two orders-of-magnitude increase in total production.  All of this means more opening up of gas fields (both associated and non-associated), more gas and gas treatment plants, more pipelines from fields to LNG plants, and to users, (power plants and to industries and homes). More pipelines (by expanding the Eastern and Western Network Pipeline Systems, particularly the Escravos-Lagos Pipeline System (ELPS; ELPS is part of the WAGP West African Gas Pipeline system)), and linking the East and West systems  (through the proposed Oben-Obriafu Obrikom Ob-Ob-Ob interconnect) will require greater readiness to MONITOR and PROTECT them 24/7 – via human protection and via technology (SCADA and GIS mapping) – with tampering of pipelines being declared a near-capital national security offence.   All of this requires billions and trillions of Naira which Government by itself cannot afford, and so private investment must be encouraged.   However, if gas is NOT to be ferried differentially to non-power uses, its pricing per mmBTU (or scf) to all users must be brought to cost-reflective par, and gas-to-power purchasing agreements firmed up and guaranteed.

Power infrastructure development, protection and pricing

With respect to power generation, despite the advantage of use of gas in power generation, clearly exposure to gas supply vagaries must be reduced if power is to be available, adequate and reliable.  One quick way is to convert as many SCGT plants to CCGT plants, which, while capital intensive, almost doubles the power capacity of the plants for the same amount of gas.   Another quick way is that favorable gas pricing for power can also lead to some LNG being re-diverted to power generation rather than being exported, a reverse path suggested in Fig. 4a.  Most importantly, the mix of energy sources must be enlarged and regionalized to include coal, (crude) oil, solar, wind, biomass and even nuclear technology (see Figures 14 and 15), with both distributed/embedded generation (of 20-100 MW per plant or even less) being encouraged nation-wide. Distributing and reducing the average capacity of each power plant, and increasing grid transmission voltage from 330 V to 440-726V (to reduce transmission losses) are essential options to consider and implement.  Again, power-line protection, like pipelines, must be given national priority using security personnel and technology, while competitive tariffs (eg Naira per kilowatt-hr kWh of energy supplied) must be set so that private investors can re-coup their money (capex recovery, opex and maintenance sustenance, and profit).  However, while users are interested in affordable tariff (naira per Kwh) regimes – whether single- or multi-year (MYTO); see Figure 18 – one can understand that they are most interested both in power reliability and in their ability to METER their own usage rather than be subjected to the present unsavory regime of estimated billings. Consequently an aggressive METER-PROVISION (including pre-paid metering) exercise must be embarked upon.

Crude oil/Petroleum Product infrastructure development, protection and pricing

Although much emphasis of this essay has so far been placed on gas and gas-to-power, issues about crude oil and petroleum products affect Nigeria’s economy and citizen life just as much.  Crude oil export sale – like increasingly LNG sale – continues to be the main income earner (70%) for Nigeria.  At about 2.0 million barrels per day production rate, crude oil in the recent past earned Nigeria up to $250 million per day, but is now down to about half of that amount or less due to weak international oil prices (see Figure 16) and sales (Nigeria’s former major buyer, the USA, once at 59%,  has completely cut off sales since July 2014).  Clearly, we must increase our oil production while looking for new crude oil markets elsewhere particularly in Asia (particularly China and India) – in the presence of the onslaught of the “democratic” discovery of shale deposits and oil deposits in many countries around the world, and a crude oil glut in the USA.  Most importantly, we must add value domestically to our crude oil to combat the present national predicament.

With respect to the domestic market, the four national refineries (in Port Harcourt (two), Warri and Kaduna) with a nameplate of 445,000 barrels per day have been operating at less than 30%, capacity, resulting in the perennial need to import refined products (particular PMS, kerosene and diesel) to satisfy domestic needs, with its attendant outrageous subsidy requirements and alleged graft and sharp practices (eg round-tripping) by various importers.  In this regard, Dangote’s recent announcement to commence a 650,000 bpd private refinery by 2017, complete with a 3.6 million tonne per annum plant for polypropylene (2.mtpa) and polythene (1.6 mtpa) is very welcome.  Oil and product pipeline vandalism, unacceptable pricing for investor confidence and incompetence at the refineries have all conspired to cause the ongoing serious petro-fuel crisis in the country.  Clearly the oil pipelines must be protected in a manner recommended for the gas pipelines; more and larger depots should be constructed to store more fuel and reduce disruptions in supply;  subsidies for refined products must be gradually removed and the savings deployed in  revamping/turning around the national refineries;  the investment environment for private modular refineries (less than say 60,000 bpd), as well as pipeline and depot construction around the country should be encouraged through both tax incentives and appropriate price guarantees.  Finally, a multi-modal national mass transportation system, particularly with a focus on rail (to transport man and material like crude and petroleum products, for example) should be rapidly developed to reduce the dependence of transportation on PMS and diesel.

Politics and Bureaucracy

The regionalization and enlargement of the mix of energy sources for power generation and general use will reduce the politics of near-blackmail which predominant sources (such as oil and gas) encourage.  It will also diffuse the cabals of technocrats which have festered particularly in the NNPC/NPDC/DPR/NGC, and NEPA/PHCN etc. over the years, technocrats who, in a round-robin manner, have practically held the nation to ransom, and who have given scant attention to trends in the international energy market, thereby leaving the country in the lurch when adverse conditions arrive.  These institutions themselves require comprehensive administrative and financial scrutiny.  Finally, political patronage which sells off oil blocks to individuals, or enables the stifling by political barons of the take-off of  worthy projects (eg. Of the refineries, of of (say) Geometric Power’s ring-fenced Aba IPP’s 141 MW gas plant despite ten years of hard work and $500 million investment)  should not be permitted.


No matter what policies or programs are arrived at, until and unless they are cast as laws and regulations, investors will hedge in their full participation in the energy sector, and other participants in the energy value chain will not fully deliver the much-needed infrastructure and services.  Consumers will be exposed to the vagaries of the market.  In this regard, the Electric Power Sector Reform (EPSR) Bill [whose major outcomes have been the unbundling of the electricity sector and setting of generation, transmission and distribution tariffs] and the Petroleum Industry Bill (PIB) [which seeks to consolidate the sixteen oil and gas laws in the country into a coherent framework, and re-organize government participation in Joint Ventures (JVs), Production Sharing Contracts (PSCs), Joint Operatorship Model (JOM), etc.)] should be thoroughly given a new combing-through by the new Buhari administration, for comprehensive review and rapid passage and/or re-working where necessary.



It is trite to state that Nigeria is at another threshold of its unsteady voyage to stellar nationhood.  Strengthening that rickety bridge must start from the energy sector.




FIGURE 1: Combined Cycle Gas Turbine CCGT Technology


FIGURE 2: Comparison of  Power Generating Capacities of Various Countries (2013)


Figure 3: Gas Value Chain in Nigeria


Fig 4a:  LNG Value Chain in Nigeria (Oando)


Figure 4b:  Comparing LNG Job Creation vs. Capital Cost (Oando)

FIGURE 5:   Daily Peak Power Generation in Nigeria (2014)


FIGURE 6a: Graph showing the 23 Electricity Generating Plants in Nigeria and their Capacities in November 2013 and November 2014


Figure 6b: NIPP Generation Plant Capacities at December 2013


Figure 7a: Geographical Disposition of the Principal Power Stations in Nigeria



Figure 7b: Disposition of Generating Stations in Nigeria




FIGURE 8a:  Pricing Differentials Across Sectors and Countries


Figure 8b: Transitional Gas Pricing



FIGURE 9a:  Nigeria’s Major On-Shore Gas Pipeline Network


Figure 9b: A More Detailed Diagram of Gas Pipelines in Nigeria


FIGURE 9c: Oil and Product Pipelines in Nigeria



Figure 9d:  Gas, Oil and Product Pipelines in Nigeria




TABLE 1: Of Crude Oil (Petroleum) Gas ad Products Pipelines

The following table lists Nigeria pipelines, as shown on the map in Figure 9b above. The pipeline routes on the map are labeled with the codes that are explained in the table. Pipeline label codes are colored green for oil, red for gas and blue for products, such as gasoline, propane and ethylene. The diameter, length and capacity of the pipeline, if known, are shown on the table.


on map
or bn cm)
——— ——————— ———— ———— ———— ———- ————-
F33 – – – Escravos Kaduna

16, 24


F341 – – – Kwale Brass (offshore)

10, 14, 24, 36


F35 – – – Ramuekpe Bonny

24, 28, 48


F36 Trans-Nigeria Pipeline Warri Ramuekpe


F392 Offshore Gas Gathering System [OGGS] Banga field Bonny Terminal



F40 Escravas-Lagos Pipeline System [ELPS] Escravos Lagos



F42 Aladja System Pipeline Oben Ajaokuta



F43 Greater Ughelli System Ughelli Warri

F10 – – – Enugu Auchi

F113 – – – Kaduna Gasau

6, 10


F124 – – – Kaduna Maiduguri

4, 6, 12


F13 – – – Kaduna Warri


F14 – – – Lagos Ilorin

6, 12, 16


F155 – – – Port Harcourt Yola

6, 12


F166 – – – Warri Lagos

12, 16


Cross-border pipelines

Nigeria – Algeria

F447 Trans-Saharan Warri Arzew


Nigeria – Ghana

F418 West Africa Gas Pipeline [WAGP] Lagos Takoradi


———- Footnotes———–
1 Ogoda
2 EA field, spur EA field to Forcados onshore
3 Zaria, Kano
4 Jos, Gombe
5 Enugu, Makurdi
6 Benin
7 Transits through Niger
8 Spur lines to Ghana (Tema), Togo (Lome), Benin (Cotonou)



FIGURE 10:  Eastern Gas Pipeline Network


Figure 11:  Western Pipeline Network in Nigeria

FIGURE 12: Major Gas and Power Outages in 2013 Due to Vandalism (?)





FIGURE 13b: Natural Gas Chemistry






FIGURE 15: Regionalization of Energy Sources for Power Generation in Nigeria


FIGURE 16: WTI and BRENT Crude Oil Prices – 1 Year Graph (June 2014 – June 2015)


FIGURE 17: Nigeria’s LNG Plants – Operational and Planned








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