Public Utilities Affected as NGMC Shuts Down Gas Supply to Ossiomo Power in Edo

Emmanuel Addeh

Several public utilities and private firms which depend on Ossiomo Power Company in Edo State have been impacted after the Nigerian Gas Marketing Company (NGMC), a subsidiary of the Nigerian National Petroleum Company (NNPC) Limited, allegedly shut down gas supply to the plant.

THISDAY gathered that the NGMC closed down supply to the power firm since Ossiomo resolved to find alternative gas supply sources following the decision of the gas marketing company to sell the commodity outside the government recommended price.

It was further learnt that the NGMC had been selling the commodity to the Ossiomo plant at $6.30 per standard cubic feet as against the government approved price, leaving a margin of over $3.4 million at a daily supply of 1 million cubic feet to the power company.

Recently, the Edo State Governor, Mr. Godwin Obaseki, disclosed plan to supply 24-hour electricity to the Benin Airport and the Nigerian Air Force Base in the Benin metropolis from the government’s Public Private Partnership (PPP) initiative with Ossiomo power.

Aside those two beneficiaries, the Ossiomo power plant, an Independent Power Project (IPP), provides electricity to government offices and streetlights in Benin metropolis; Emotan Gardens Estate; Edo Tech Park, Edo Modular Refinery; the John Odigie Oyegun Public Service Academy and Edo Creative Hub, among others.

Recently, it announced that its new 40MW plant, dedicated to providing power to the Benin Industrial and Enterprise Park had become operational and connected to power Ologbo and Obayantor communities in Ikpoba Okha council of the state.

The new plant management said it increased the generation capacity of Ossiomo Power to 95MW, as a 55MW plant had been operational since 2020.

Also recently, the state government announced that it had concluded an agreement with the Benin Owena River Basin Authority for the supply of electricity to the authority’s facilities through Ossiomo.

 But in a brief statement obtained by THISDAY, Ossiomo which confirmed the development, alerted the public to the forceful shutdown of its plant by the NGMC for no justifiable reason.

A statement signed by Adeyinka Ladejobi on behalf of the company said the situation had been escalated to the right quarters in order to resolve the matter which he said had negatively impacted many customers.

“We apologise for this unannounced outage.  This outage is as a result of a forceful shutdown of our gas plant by NGMC without any notice. The situation has been escalated accordingly and we shall keep you posted,” the brief statement stated.

Officials of NGMC did not want to be quoted on the matter, but the federal government had announced the immediate reduction in domestic base price of natural gas to power plant producers per standard cubic feet (scuf) recently.

Minister of State for Petroleum Resources, Timipre Sylva, who made the disclosure at the opening of the 2021 Gas Sector Stakeholders’ Forum for optimisation of the 614-kilometre $2.6 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline in Kano, said it would save billions of naira lost by power firms.

The minister who harped on the inherent impact of the new price regime, had explained that the decision followed a mutual negotiation between government and the Nigeria Labour Congress (NLC).

The NGMC was incorporated to market and distribute natural gas nationally and to regional African markets and has a mandate to promote the utilisation and monetisation of natural gas resources. It supplies about one million scuf.

“Ossiomo supplies state government’s house ShopRite, hotels, schools, hospitals and other public utilities in Benin. NGMC had been supplying them gas and selling at a higher price.

“So, Ossiomo made other arrangements because they are in business and looking for lower costs. Because of that NGMC has shut down Ossiomo. It negotiated with a private supplier who was supplying them at $2.90,” a source said.

Secretary of the Ologbo community, Mr Friday Osazuwa, told THISDAY that the situation had further impacted Ossiomo’s ability to perform its Corporate Social Responsibility (CSR) to the area.

 “They complained to us that gas price is too high and as such cannot continue the CSR projects and remain profitable,” he said.  According to him, Ossiomo couldn’t do their CSR projects because of the development, adding that the company stopped supplying the community power because of the high cost of gas.

“We made effort to reach the management of NGMC to reduce the price so we can continue to enjoy power and the CSR projects to no avail,” he added.

He called on the federal government to urgently intervene so that the situation would not deteriorate further.

But a reliable source from the NGMC who spoke on the matter described the allegation as ridiculous, stressing that it’s not possible to just shut down a company on the basis of change to an alternative source of gas supply.

“The whole allegation is laughable because nobody will stop you from seeking an alternative source of gas. Once you are cut off, the next thing to do is to ramp up action on your alternative. It’s simple logic.

“It’s not even possible because it doesn’t make sense. This is just a group of people trying to brand a cat because they want to kill it. It doesn’t make sense because there are reasons for which a customer can be cut off.

“If the indebtedness is high, we cannot continue to operate in that kind of environment because you will need to pay up and that paying up is not a sudden thing. There will be series of negotiations and meetings etc. So, whatever the person is expressing is not the truth,” the source stated.