Oil majors sign gas agreements with PHCN

As part of the strategy to end gas shortage for power plants, some International Oil Companies (IOCs) yesterday signed gas purchase agreements with Power Holding Company of Nigeria (PHCN). The agreements are to boost gas supply for Egbin Power Plant in Lagos to run its turbines. Egbin is the largest power plant in the country with about 1350 Mega Watts of electricity per day capacity. Due to shortage of Gas, Egbin is not producing more than half of its capacity to the national grid.

The companies involved in the agreements include Shell Petroleum Development Company (SPDC), Chevron Nigeria Limited (CNL), Nigeria Agip Oil Company (NAOC), and Nigerian National Petroleum Corporation (NNPC) on one hand and the Power Holding Company of Nigeria (PHCN) on the other hand.

The two agreements signed were Sellers Representative Agreements and Gas Sales Agreements. The event supervised by the Minister of Petroleum Resources, Mrs Diezani Alison Madueke was second in the series of the signing of the gas agreements for power generation in the country. With such agreements, the government has began to create confidence amongst investors to step up gas supply development for the Nigerian domestic gas sector, Mrs Madueke said

“We are executing gas supply agreements between the top two gas supply joint ventures in Nigeria namely the NNPC/SPDC and NNPC/CNL JVs. Collectively, these two JVs’ will be supplying about 70 percent of the total power sector gas requirement”, the minister said.