The Federal Government in Abuja on Tuesday signed a Memorandum of Understanding (MoU) with nine oil companies for the supply of gas for power generation in Nigeria.
They are Chevron, Shell Petroleum Development Company (SPDC), Nigeria Petroleum Development Company, SEPLAT Petroleum, Agip, Oando, Pan Ocean, Total and Nigeria Gas Company.
The electricity distribution and generation companies were also involved the ceremony.
The Ministers of Power, Petroleum Resources, Group Managing Director of NNPC, Central Bank of Nigeria (CBN) and Nigeria Electricity Regulatory Commission, signed on behalf of the Federal Government.
The Federal Government, on Sept. 13, announced a N213 billion facility to help offset gas debts and address the revenue shortfall in the power sector.
The Minister of Power, Prof. Chinedu Nebo, said the ministry had developed an operator platform to ensure that transparency was maintained in the market.
He said the ministry was working assiduously to make sure that all the conditions precedent to the declaration of the Transitional Electricity Market were fulfilled.
The minister said that the country had generated between 4,000 and 4,500 continuously for six weeks.
Nebo noted that before and after the handover of the power sector to private investors, the market continued to accrue a lot of debts due to non-payment for gas and power supplied.
He added that that was why government came up with the Nigerian Electricity Supply Industry Fund.
The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, said the legacy gas debt of N36.9 billion owed gas suppliers by the power sector was being settled by the CBN-led intervention scheme.
“With this intervention, all undisputed claims are hereby settled’’, she said.
She said that in order to move the sector forward, appropriate security mechanisms would be put in place to ensure payment of the gas sold to the power sector to create a viable and sustainable sector.
The minister said that the intervention was complemented by a reciprocal commitment by the gas suppliers.
She added that the intervention by the gas companies would add 2.5 billion cubic feet per day of gas to the grid.
Diezani said that more than 80 per cent of the gas would go to the power sector supplying additional five to six giga watts.
She assured that with the combination of projects, the target of 5,000 mega watts by December would be achieved.
“I believe that these interventions will cumulatively bring permanent closure to the challenge of undersupply of gas in the domestic market’’, she said.
The agreement will be followed by the disbursement of the intervention fund and monitoring its implementation
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