Nigeria power project delay

A plan by Mobil Corp. to construct an independent power plant in Nigeria has run into difficulties over disagreements with the Nigerian government. The government had earlier approved the $1.5bn plant, which would use residue or dry gas from Mobil Corp.`s recently commissioned Oso natural gas liquids project.

Senior government officials have rejected Mobil`s request to use taxes and royalties payable on its primary operation as a guarantee of its expected business relations with the National Electric power Authority (NEPA). Mobil planned to sell the output from the 350 MW power plant to NEPA. Mobil`s request was based on fear of default on payments by NEPA for the electricity supplied to its system from the 350 MW plant.

The combined cycle plant is planned for construction at Bonny, Rivers state. Mobil is to develop it on a build, own, operate, transfer basis, increasing the nation`s generating capacity by 15 per cent. The use of dry gas from Mobil`s Oso project is part of Nigeria`s plan to cease gas flaring.