Senate C’tee Insists 215 MW Kaduna Power Plant Cheaper by LNG

•   orders suspension of planned commissioning

Damilola Oyedele in Abuja

The Senate Joint Committee on Gas and Power, Steel Development and Metallurgy has kicked against the Ministry of Power, Works and Housing’s plan to run the 215 megawatts Kaduna Power Plant on diesel, instead of Liquified Natural Gas (LNG), which it said is a cheaper alternative.

The committee, at a hearing in the “Urgent need to save the 215 MW Kaduna Power Plant,’on Monday, therefore ordered the suspension of the planned inauguration of the plant in January 2018, over the development.

Lawmakers at the hearing heard that the power plant was initially designed to run on gas, when it was inaugurated in 2009, but the ministry suddenly turned around and changed the parameters to that of a diesel powered plant.

Running the plant by diesel would cost the country N46 million on a daily basis, with the change in original design causing the cost of power to be higher, the committee heard.

The Chairman of the Committee on Gas, Senator Albert Bassey, expressed dissatisfaction at the reasons proffered by the officials of the Ministry, led by the Permanent Secretary, Mr. Louis Edozie on why the plant was changed to a diesel powered plant.

“I feel very disappointed. Please tell your minister to stop the process of inauguration because the project cannot be ready even by mid next year,” he said.
“We are insisting that it will be cheaper to run the plant with Gas and Gas is environmentally friendly. Let your Minister know we cannot be taken for granted,” Bassey said.

The Chairman of GreenVille LNG, Mr. Eddy Van Den Broeke, in his presentation to the committee, disclosed that his company had a signed Memorandum of Understanding (MoU) with the ministry, on the project, to construct gas storage facilities of the power plant at no cost to the federal government.

Van Den Broeke added that based on the MoU, his company has invested $400 million on the gas plant in Rumuoji, Port Harcourt, in addition to importing 250 trucks meat to move LNG to the power plant.

“In 2014 when the parametres were signed it was agreed that LNG (Liquified Natural Gas) is most competitive. We have invested $400million after which people in the ministry decided to change the parameteres. It will cost $200 million more to use AGO(diesel) because there is no other fuel available that can replace LNG and GreenVille. I would want the ministry to give me one cent of response on this change of theory,” he said.

Speaking earlier when he declared the hearing open, the Senate President, Dr. Bukola Saraki, said it was necessary to examine the cause of the shift from the use of LNG, to diesel to power the plant.

Saraki, who was represented by the Senate Deputy Whip, Senator Francis Alimekhena, said the use of LNG is environmentally friendly, much more sustainable and is in line with the charter of the United Nations on Free Energy and Climate Change.

“It is surprising that the Federal Ministry of Power, Works and Housing appears to have jettisoned the use of gas to power the Kaduna power plant and instead, opted for the construction of Automobile General Oil (diesel0 tanks for the use of AGO, which is 60 per cent higher in cost when compared with gas,” Saraki lamented.

The Senate President said the advantages offered by LNG informed the decision of the federal government, through the Nigerian National Petroleum Corporation (NNPC) to plan a contract for the construction of the 40x614km Ajaokuta-Abuja-Kaduna-Kano gas pipe line.