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COO Gas & Power, NNPCOctober 2020

COO Gas & Power, NNPCOctober 2020

COO Gas & Power, NNPCOctober 2020

Meeting of GACN 2020

South East Gas Utilization

Forum:

Improving Steady Supply

of Power in the South East

Presentation Outline

The GACN Gas Forum

NNPC Gas and Power Business Priorities

Natural Gas Production and Utilization

Nigeria Power Sector Overview

NNPC Power Initiatives

Improving Power Supply in SE Region

Conclusion

3

The GACN Gas Forum

It is commendable that this gas utilization forum, organized by the Gas Aggregation

Company of Nigeria (GACN), is organized in such time that natural gas play a key role

in economic development. In order to achieve its business mandate, GACN is

galvanizing a healthy business collaborations amongst the major stakeholders in the

gas sector to ensure:

The successful implementation of the Nigerian Gas Master Plan (NGMP)

commercial framework;

Efficient monetization of the abundant natural gas resources;

Adequate supply of Gas to the strategic sectors of the Domestic Market to

stimulate natural gas utilization in-country; and

The achievement of the much-desired industrial growth and national

development through domestic gas utilization, among others.

Thus, it is worthy to note that the NNPC Gas and Power Directorate Business Priorities

have a strong Business NEXUS with the mandate of GACN

4

Deliver Gas Master Plan Infrastructure Blue

Print

Grow domestic gas utilization to 5bcfd by

2022

Develop 5GW Power Generation by 2022

Explore Transmission partnerships/investments

to unlock evacuation & power improvements

Deliver NLNG T7 by 2024

1

2

3

4

5

NNPC Top 5 Gas & Power Key Business Priorities

5

Domestic Gas Demand vs Supply Profile (2020-2030)

Base case domestic gas demand will grow from the current 3.8bscfd to a peak of 7.4bscfd by 2025. However, based on all

known domestic gas supply projects, gas supply is expected to grow from 2.2bscfd by end 2020 to 5bscfd by 2023 and further

ramp up to match demand by 2025 if all the gas supply projects are implemented as planned

6

Average Gas Production & Utilization

(January 2020 to Date)

7

Domestic Gas Supply Recovery Plan

8

Nigeria Power Sector Issues

1. Nigeria ranks poorly in grid-based

electricity consumption (126kWh

per capita) some African countries

like Ghana and South Africa at

361KWh and 3926kWh respectively.

2. Given its GDP, Nigeria’s electricity

consumption should be 4-5x higher

than where it is today based on

regional trends as reflected in the

next slide using Ghana and South

Africa as comparators.

3. Today, ~120million Nigerians are

without access to electricity, and

those that do have access (45%),

face extensive power outages

4. Nigerians get a significant portion

of their electricity from private

generators at a higher cost (USD

0.35/kWh) than grid-based (USD

0.08/kWh) power.

5. The Nigerian power sector involves

a regulator; a trading company

and three main players – Nigerian

Electricity Regulatory Commission

(NERC), Nigeria Bulk Electricity

Trader (NBET), generation

companies (Gencos), Transmission

Company of Nigeria (TCN), and

distribution companies (Discos)

6. Nigeria has about 13,522 MW

installed capacity, but given

various inefficiencies in the sector,

effectively only about 5,200 MW is

generated, about 4,500 MW

transmitted, and about 3,400 MW

distributed

7. The sector currently struggles with

financial viability as there are

significant collection losses and

cash flows are not fully passed

through from one playerto another

9

GW, average Jan-Aug 2018

Transmission DistributionGeneration

Commercial

and

collection

losses

Technical

losses

Capacity

distributed

3.3

1.1

2.2

-85%

Capacity

paid for

13.5

3.9

Capacity

not being

utilized

4.1

0.2

Installed

capacity

Capacity

transmitted

Operational

Capacity

9.4

Transmission

losses

Non-available or non-

operational capacity

Nigeria power sector energy flow

0.6

Nigeria Power Overview Cont’d – Power Generation

SOURCE: Updated Generation Stats, TCN NOR Reports, UDI database.

Power Transmission & Distribution Liquidity Issues

Generation is constrained by:

10

Status of Gas Supply to Power Plants

- January 2020 to Date

10

Okpai

Azura

Trans

Amadi

Paras

Rivers

IPP

Omotosho

NIPP

Olorunshogo

NIPP

Geregu

NIPP

Sapele

NIPP

Plant with Gas Constraints

Plant with Power Evacuation Issues

Plant without firm GSAA

50% and below Gas Supply

50% - 80% Gas Supply

80% and above Gas Supply

Afam

IV-V

Plant with available units on bar

Transcorp

Gas supply to power is constrained mainly due to power evacuation challenges. All available thermal

power plants have power evacuation challenges.

11

FCT

LAGOS

KADUNA

KANO

AKWA

IBOM

450MW-Agura

900MW-Kaduna IPP

1350MW-Kano IPP

576MW-QIPP

• In 2019, FGN Launched Siemens/FGN Presidential Power Initiative (PPI) structured in three phases:

- Phase 1 – Targets to increase system’s end-to-end operational capacity from ~4.5MW to 7MW by 2021

- Phase 2 – Targets to resolving outstanding Transmission & Distribution Network bottlenecks to enable full

utilization of 11MW of existing generation;

- Phase 3 - Targets the expansion of Nigeria’s power grid to 25 GW by 2025 and beyond.

• Planned Power Tariff Improvements in 2020.

• Planned Power Revenue Collection Enhancement to improve industry Liquidity, amongst others.

Summary of FGN/Siemens PPI Intervention Program

Power generation projects already being planned by the

Nigerian National Petroleum Corporation (NNPC) are as

follows:

a. Abuja: 1,350 MW(Combined Cycle Power Plant)

b. Kaduna: 900 MW (Combined Cycle Power Plant)

c. Kano : 1,350 MW (Combined Cycle Power Plant)

d. Agura : 750 MW (Combined Cycle Power Plant)

e. Qua Iboe : 560MW (Combined Cycle Power Plant)

f. SEEPCO KGL: 1050MW (Combined Cycle Power Plant)

g. Obite: 420MW (Combined Cycle Power Plant)

h. Imo: 420MW (Combined Cycle Power Plant)

NNPC is latching into the FGN/Siemens PPI Program to accommodates all the proposed 5GW of the New

NNPC Power into the National Grid

1350MW-Abuja IPP

Delta

1050MW-Kwale IPP

Imo

420MW-Obite IPP

Nigeria Power Overview Cont’d – Current Interventions

420MW-Imo IPP

12

The NNPC & PERTNERS Power Initiatives

Existing Power Plants:

NNPC, with its Joint Venture partners have been playing key roles to

improve the Nigerian power sector, including the South East Region

NNPC/NAOC JV established a 480MW phase I IPP at

Okpai in Delta State

The Power Plant is the most reliable IPP in Nigeria

The IPP produces an average of 3 million MWh per year

Accounts for about 12% of total energy generated per

year nationwide

The Okpai 450MW Phase II that will ramp-up power to

~1000MW is at advance stage of completion

480MW Okpai Phase 1 JV IPP

450MW Okpai Phase 2 JV IPP

650MW Afam VI JV IPP

Similarly

NNPC/SPDC JV established a 650MW Afam VI IPP in River State

The IPP is the 2nd largest contributor to grid generation

Largest CCGT plant on Grid

About 22TWh (Trillion watt-hour) Energy has so far been delivered

to Nigerian National Grid by the IPP

Okpai

Phases 1&2

13

Existing Okpai 1&2 and Afam VI IPPs:

Both power plants constitute about 40% of the national power supply, including the South East.

Both power plants significantly service the franchise areas of Enugu Electricity Distribution Company

(EEDC), and aimed at improving the energy supply level to the south East region, namely; Abia, Anambra,

Ebonyi, Enugu and Imo states.

The Okpai 450MW Phase 1 IPP supplies Power to Onitisha, Anambra State and its Environs within the South

East Region vide the 330 kV Overhead Transmission Line – Extension of Onitsha-Obosi Sub-Station.

The Second Phase - Okpai 450MW Phase 2 IPP has been completed and ready to inject at least additional

320MW extra capacity to the national grid vide Okpai-Onitsha Double Circuit (DC) TLine by Q4 2020.

This will translate to more power availability for Nigerian homes within the South East Region.

New Power Plants Investments:

The additional over 5000MW IPP being developed by NNPC with its JV Partners, across

the Country, comprises:

- Qua-Iboe (540MW) IPP in Akwa Ibom State;

- Obite (420MW) IPP in Rivers State; and

- Imo 420MW IPP

Also, the Corporation is currently exploring business collaborations with the Transmission Company of Nigeria

(TCN) for funding of critical power evacuation infrastructure that will enable adequate geographical spread of the

total power generated, including the SE Regions.

NNPC Efforts in Improving Power Supply in South East Region

All targeted to be installed to improve power supply in the

South East, amongst other Regions.

14

Okpai is likely well-located to benefit from the Eligible Customer

ProgrammeNigeria Distribution Company Territories

Lagos

BayelsaRivers

ImoAbia

Akwa

Ibom

Adamawa

Bauchi

Gombe

Kaduna

Fct

Nassarawa

Plateau

Taraba

Benue

Cross

River

Enugu

EbonyiAnambra

Delta

Edo

Kogi

Oyo

Ogun

Osun Ekiti

Ondo

Kwara

Niger

Sokoto

KebbiZamfara

Katsina

Kano

YobeJigawa

Borno

Kaduna Distribution company

Kano Distribution company

Yota Distribution company

Jos Distribution company

Eko Distribution company

Benin Distribution company

Port Harcourt Distribution company

Enugu Distribution company

Abuja Distribution company

Ibadan Distribution company

Ikeja Distribution company

Potential Eligible Customer catchment area

Manufacturing,

Automotive

Manufacturing,

Markets

Entertainment,

hospitality

Potential concentrations of Eligible Customers

Examples of potential customers

▪ Manufacturing e.g., ABInBev brewery plant

▪ Automotive e.g., Innoson Motors

▪ Significant commercial market centers

15

The Nigeria Electricity Supply Industry is challenged with transmission and distribution constrains with

current power generation capacity estimated at circa 13.5GW, but only about 4GW can barely be

transmitted due to inadequate evacuation and distribution infrastructure.

Thus, NNPC, as Enabler Organization, is implementing power business initiatives aimed at

repositioning the Corporation energy company, with a sizable power portfolio thereby stimulating

positive economic growth.

NNPC is desirous of collaborating with EDC in unlocking the available power from Okpai and Afam to

stimulate the utilization of natural gas in the Nigerian domestic market, for economic growth and

national development, of the country in particular the South East Region.

NNPC is looking forward to a potential collaboration with Enugu Distribution Company towards

supplying power to eligible off takers and markets in the eastern region to utilize the full potential of

Okpai 1 & 2 as well as the Afam JV IPP.

Conclusion

16

Thank you