Business

Gas investors kick as debt takes toll on power sector

Gas investors in Nigeria have bemoaned the worsening debt profile of power sector in gas-to-power value chain, stating that this is already taking a toll on the industry’s viability.
Rising under auspices of the Nigerian Gas Association (NGA), the apex association for stakeholders in gas sector, the investors rallied gas experts and policy makers at a webinar for solutions to Nigeria’s gas sector challenges.
President, Nigerian Gas Association (NGA), Mrs. Audrey Joe-Ezigbo, voiced the frustration of her members involved in supply of gas to power plants during a keynote speech at the webinar seminar organised by NGA.
Other participants at the webinar entitled: “‘Using Natural Gas as a Roadmap for Nigeria’s Recovery, Growth and Prosperity,’ included Chief Executive Officer (CEO) of Seplat, Mr. Austin Avuru, Managing Director of Nigerian Gas Company(NGC), Engr.Oluwaseyi Omotowa, Managing Director, Nigerian Gas Marketing Company (NGMC), Mr. Mohammed Ahmed, Independent Energy Consultant, Dr. Lawrence Ijebor, and Managing Director of Gas Invest, Dr. David Ige.
The NGA president lamented that some of its members supplying gas to power plants were yet to be settled for invoices submitted in September 2019, which she said runs into several trillions trillion.
He ssid: ‘‘I do not have the exact numbers as at today but what I can tell you that from our members who are gas suppliers, I am talking about several trillions with many of the invoices not settled for quite a while. None has been settled this year while we have some that have not been paid as far back as last September.
‘‘How can you survive running a business without being paid for services delivered over 10 months ago? Some of our members are just doing this as a national sacrifice which she said is no longer sustainable in view of current realities occasioned by the coronavirus pandemic.’’
The NGA president equally decried the payment mode, which, she said were sometimes settled in trickles of about 30 per cent of invoice value, leaving the outstanding to spill over till a later date, saying this does not connote a sustainable measure.
According to her, some of these actions on the part of the power sector have led to the declaration of force majeure by gas suppliers.
‘‘The NGA’s position for some of our members, who into the gas supply side, is actually that of commendation because it is very hard to continue to supply gas into a market where you are not been paid. This is really a nationalistic approach that they have adopted to continue to deliver gas to the power sector even in the face of what is clearly an illiquid value chain,’ she said.
She said she believed that there was still need to look at the structure, adding that discussions are ongoing to ensure that there is securitization for players in the power sector value chain, stressing that one of the things NGA is exploring is a higher level of handshake between the Ministries of Petroleum Resources and Power.
According to her, ‘‘this is so because when you talk about gas-to-power, you are dealing with two different Ministries, including parastals and their agencies which don’t make sense. We need to have a firm handshake so that we can collectively deal with the issues on the supply side as much as we are looking at transmission down to the power supply and the end users.”

 

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