THE federal government is losing N470 million daily as a result of the attack on the Nigeria Gas Company’s pipeline connected to Chevron Nigeria Limited’s facility at Escravos in Delta State on Saturday, January 16. According to the federal ministry of power, the vandalism of the gas pipeline would impact negatively on the Olorunsogo National Integrated Power Project plant, which has capacity for 600 megawatts of electricity, and other power plants across the country.
Hakeem Bello, special adviser on media to the minister of power, works and housing, in a statement on Wednesday, January 20, said although security agencies had intensified the search for those behind the attack on the pipeline, their action would slow down the country’s power supply system.
Explaining the financial and economic implications of the action on the Nigerian economy, he said, “The sabotaged gas pipeline, which contributes to the Escravos-Lagos Pipeline System, has led to a loss of 160mmsfcd of gas daily. At a cost of $2.50 per thousand scf, this loss means about $400,000 loss to the country on a daily basis (N78.8m) in gas volume. This is in addition to losses to be incurred daily from power generation ($1,988,223 or N391,680,000 daily). The total daily loss to the country is, therefore, estimated at N470,479,931. Repairs of the damaged pipeline are estimated to cost $609,137 or N120,000,000.”
According to the ministry, the real sector of the economy has also been counting its losses as some cement companies around Olorunsogo like Ewekoro and Ibese are also affected. It stated that the latest incident occurred when the federal government through the ministry of power, works and housing, and the ministry of petroleum resources along with allied agencies had been making concerted efforts to improve gas supplies to the power plants. “Such efforts led to previously offline plants like Ihovbor and Sapele coming back online and the subsequent output making up for the loss in power. The pipelines are being actively monitored for further attacks or other unforeseen impacts,” the statement noted.
The ministry added that available records showed that six incidents of vandalism from December 2014 to February 2015, which affected the Trans Forcados Pipeline at Oben, Sapele and Oredo, and the Escravos Lagos Pipeline System CNL led to a loss of 1,100mmscfd.
— Feb 1, 2016 @ 01:00 GMT