Prospects for gas-to-power: The Aiteo legacy for Niger-Delta

The recently released Economic Recovery and Growth Plan (ERGP) 2017 -2020 restates the Federal Government’s resolve to frontally address issues of energy from the perspective of electric power and the petroleum sector. Apart from its cardinal objective to reduce petroleum product imports by 60 per cent next year and become a net exporter by 2020, save foreign exchange and prevent reversion to the fuel subsidy regime, the Plan is specific about government’s high regard for the power value chain, and its efforts to concentrate on overcoming the current power challenges in relation to governance, funding, legal, regulatory, and pricing issues across the three main power segments of generation, transmission and distribution, and ensuring stricter contracts and regulatory compliance.

According to the 140-page document, “The ERGP aims to optimise the delivery of at least 10GW of operational capacity by 2020 and to improve the energy mix including through greater use of renewable energy.

“Nigeria has 12.5 GW of installed capacity, but less than one-third is operational (average 3.9 GW in 2015; 3.2 GW in November 2016). Overall, only about 15 per cent of installed capacity is eventually distributed to end users, resulting in a huge shortage of electricity supply across the country.”

Aiteo has been consistent in its alignment with the Federal Government’s reneweddrive to optimise the nation’s operational power capacity by 2020 to boost economic activity across all sectors and improve the quality of life of the citizenry. Every move of the integrated energy group appears to be one taken at the right time.

The energy conglomerate took a major risk and heavily invested when the Federal Government’s aim of developing Nigerian companies in the country’s upstream oil and gas business was at full throttle. The Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell plc (Shell), marked the completion of its divestment programme with transfer of its 30 per cent stake and operatorship of the oil mining lease 29 and the Nembe Creek Trunk Line (OML29 and NCTL) and related facilities in the Eastern Niger Delta to Aiteo Eastern E&P Company Limited, a subsidiary of Aiteo Group. The transaction also saw Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited assign their interests of 10% and 5% respectively in the lease, ultimately giving Aiteo Eastern E&P Company Limited a 45% interest in OML29 and the Nembe Creek Trunk Line.

Again, when it seemed the nation would grapple with the challenge of low oil production for long, Aiteobroughta message of possibility and hope when it struck an unprecedented accord with host communities that gave rise to its E & P activities which in turn brought about the landmark 90,000 barrel per day production that was celebrated in the media with pageantry. The feat came on the heels of the lacklustre output that peaked at 23,000bpd a year earlier prior to its takeover of the OML 29.

Aiteo’s power generation group has been working to harness Nigeria’s vast natural gas resources and generate energy from its indigenous and renewable resources, with a particular focus on hydroelectric power.Through strategic partnerships and joint development of opportunities, its gas subsidiary is participating in gas gathering and processing facilities, LPG production, storage and distribution, pipeline infrastructural network development and NGL (natural gas liquids) processing, transportation and logistics (including compressed natural gas solutions). Not less than 7.6 million has been estimated to be the number of Nigerians who stand to gain access to a power grid with Aiteo generating power; a number which will geometrically increase as it expands into other African countries. This, Aiteo is working to achieve, using gas and oil and coal to generate electricity and market it to Nigeria and other West African countries.

Positioned as one of the drivers of Nigeria’s move towards attainment of power sufficiency,Aiteo is poised to tackle the power challenges in the country head-on through its legacy investments in the gas-to-power value chain. This is a testament to the company’s commitment to the transformation of the entire oil & gas value chain into a world-class landscape.

Aiteo’s electricity distribution division was once reported to be in the process of identifying a suitable location in eastern Nigeria for the construction of a 250-MW independent gas-fired power plant to supply the national grid. Its main exploration target, the Niger Delta basin, has been reported to contain as much natural gas as any reserve ever discovered, a find which provides Aiteo with abundant resources to not only sell directly, but also fuel Aiteo electrical generation plants. Its present efforts at unlocking previously untapped reserves of natural gas are complementing Africa’s position in the dual industries of oil and gas production. This comes with its concomitant huge challenge. However, with the calibre of people at the helm of affairs of the group, the challenge of delivery on its promises is largely mitigated. Aiteo Power and Gas has Ransom Owan as its Group Managing Director. Dr.Owan was the pioneer Chairman and Chief Executive Officer (CEO) of the Nigerian Electricity Regulatory Commission (NERC). This speaks volumes about the expertise and experience being brought to bear on the operations of the company.

Aiteo’s high capacity in power generation is incontrovertible. The company has great prospects to transform the Niger Delta into a power hub in the next 5 years. It therefore should not come as a surprise in the nearest future when Aiteo’s power generation and distribution division releases mind blowing facts and figures showing its stride in power sector, reminiscent of its widely celebrated 90,000bpd feat.

Olusola Bello