Africa, Gas & Oil Fired, Middle East & Africa, New Projects

Nigerian Senate halts commissioning of gas power plant

Nigeria’s Senate has halted the scheduled commissioning of a gas-fired power plant due to a contract dispute between the power ministry and its gas supplier.  

The 215 MW dual-fuel plant in Kaduna state was planned to be commissioned in January and is already three years behind its original commissioning date. Once online, the N45bn ($186m) plant is expected to help revive Kaduna’s languishing textile industry.

But this week, following a hearing on the plant, the Senate voted to suspend commissioning after the power ministry changed the terms of its contract with its gas supplier, deciding to run the plant on more costly diesel. 

At the hearing, Abuja-based gas supply firm Greenville LNG said it had signed a memorandum of understanding (MoU) with the ministry and on that basis had built a gas storage facility at the plant for free, and had invested $400m in a gas plant in Port Harcourt.

Eddy Van Den Broeke, Greenville LNG’s CEO, reportedly said at the hearing that “in 2014 when the parameters were signed it was agreed that LNG is most competitive.

“We have invested $400m after which people in the ministry decided to change the parameters.”

In addition, he said his firm had imported 250 gas supply trucks before the ministry changed the terms of the contract.

Running the plant on diesel, he added, “will cost $200m more”.

Senator Albert Bassey, co-chair of the Senate Joint Committee on Gas and Power, Steel Development and Metallurgy, was quoted as saying the plant “cannot be ready even by mid-next year” as the Senate would need to further examine the situation.

The plant is being built by a consortium of GE and Nigerian EPC firm Rockson Engineering. It features eight GE simple cycle turbines as well as a 132/32 kV substation and a 33 kV distribution line.