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Gas
Wisdom From Gaslink
Manufacturing concerns opt
for the new gas option with the coming of Gaslink as the real
alternative to NEPA
By
Phillip Oladunjoye
Gaslink Nigeria Limited,
an indigenous gas company is gradually breaking the monopoly of
the National Electric Power Authority, NEPA, as the only source of
power supply in
Nigeria
. The company which embarked on the
distribution of natural gas as a source of energy has been
accepted by many companies in
Lagos
as an alternative to NEPA. Gaslink supplies
electricity power to many companies at the Ikeja Industrial Estate
in
Lagos
through its natural gas pipeline. Newswatch
learnt that most manufacturing companies that have hooked up to
its pipeline now enjoy uninterrupted power supply.
Babatunde O. Mafe,
manufacturing/project controller, CarnaudMetal Box Nigeria PLC,
whose company is linked to Gaslink described the natural gas
initiative from Gaslink as “the best thing to have happened to
industries in recent times.” He told Newswatch that the
use of natural gas to generate electricity has saved the company a
lot of money in energy cost. “You save around 60 percent in your
energy cost. If you compare it with kerosine and diesel, gas is
cleaner, environmental-friendly, and the quality of job coming out
from the oven is far better,” he said.
Mafe explained that
since his company hooked up to Gaslink in November last year,
there has not been any interruption in power supply. He noted that
the use of natural gas provided a safety mechanism against the
ardous task of getting delivery from kerosine tanker, as well as
checking corrupt tendencies of receiving officers.
Gbenga Adebija,
corporate affairs manager, Cadbury Nigeria PLC, also affirmed that
the use of piped gas was more cost-effective than the diesel,
which his company was using before it hooked up to Gaslink last
year. “We are beginning to see the gains. Hopefully, in future
we will continue to consolidate the gains,” he said. Dunlop
Nigeria PLC is another manufacturing company, which has joined the
league of industries using natural gas as a source of energy. Kola
Poopola, its general manager, works said the huge investment made
by his company to convert to gas is justifiable. According to him,
Dunlop had witnessed 60 percent reduction in low pour fuel oil,
LPFO, as a result of the use of gas. He said Dunlop spent N35.5
million on gas in the first year compared to N59 million spent on
LPFO the previous year. “Use of natural gas results in reduction
in energy cost, reduction in maintenance cost as well as reduction
in environmental pollution,” he said. Recently, Governor Bola
Tinubu of
Lagos
state officially inaugurated the Ikeja Phase
1B of natural gas distribution by Gaslink. Lending credence to the
utilisation of natural gas as a source of energy Tinubu said, the
introduction of the gas distribution project represents a giant
leap towards the realisation of the country’s goal of growing
the economy through the provision of infrastructure. “This noble
effort is coming at a time when the real sector is faced with
rising cost of production occasioned by exorbitant energy cost,”
he said. He was of the opinion that “the project would enable
more firms have access to natural gas, which by its nature, is
cheaper, cleaner and environment-friendly than other liquid fuels.
Tinubu said the project would not only guarantee
pollution-free environment but would equally increase the overall
socio- economic activities in the state. The governor expressed
the hope that this would attract new investment to the state,
particularly, because of the cheap source of energy capable of
translating into cheaper goods and services. He urged
manufacturers and other commercial outfits, benefiting from the
use of this new source of cheaper energy to reduce the prices of
their products.
“With the Gaslink
initiative, it is believed that manufacturers and other commercial
outfits, will reciprocate by reducing the prices of their
products,” he said.
Tinubu, however,
bemoaned the colossal waste of gas through flaring and advised
that it should be harnessed for the benefit of the country.
Nigeria
’s gas reserves is estimated at about 169
trillion cubic feet while about two billion standard cubic feet of
associated gas is currently flared daily. In monetary terms, the
flared volume is a colossal waste of revenue to the country.
“This could be harnessed and put to judicious use to stimulate
growth and drive the economic fundamentals for improved
performance of the economy,” Tinubu said.
Charles Osezua, managing
director, Gaslink Nigeria Limited, said with the completion of the
Ikeja Phase 1B project, the gas distribution firm can now deliver
20 million standard cubic feet of natural gas per day to its
customers. According to Osezua, this quantity represented 25
percent of GasLink’s operating installed capacity.” He
explained that many industries in its operational area were yet to
hook up to the available facilities. “This, he said, “is a
clear indication that gas is fuel for the future.”
Wale Tinubu, chairman of
Gaslink, who is also managing director Unipetrol PLC, a sister
company of GasLink, said since gas distribution started, it has
signed Gas Sales and Purchase Agreement, GSPA, with 21 companies
out of 30 potential consumers. Some of the companies that have
converted to the use of gas include: Cadbury Nigeria PLC, Dunlop
Nigeria PLC, Reliance Textile, Robicon Extrusion, UNICO and
CarnaudMetal Box Nigeria PLC. Others include Nigerian Enamelware
PLC and Seven Up Bottling Company PLC. The 350 housing units in
MKO
Abiola
Gardens
which happen to have been situated along the
“Right of Way” of the distribution pipeline would also benefit
from the use of gas for domestic purposes.
Newswatch
learnt that by the time all the industries in the Ikeja gas
distribution system are fully connected to gas, about 190 million
litres of low pour fuel oil would be displaced in the energy
market per annum. This could make for N1 billion naira annual
savings in energy bills for the industries. The chairman believes
that this would translate into a drop in the prices of goods and
services and should consequently impact positively on the economy
for the average Nigerian.
The inauguration of the
Ikeja Phase 1B project marked the completion of the first phase
out of the two phases of gas distribution project, to be carried
out in
Lagos
State
by GasLink Nigeria Limited. Phase 1A of the
project which was a 10- kilometre length of gas distribution
pipeline covering Ikeja industrial area was inaugurated
March 9, 2001
. And the phase 1B of the project was a
4.6-kilometre of the distribution pipeline covering the Oregun
industrial area of
Lagos
State
.
The second phase which
is tagged “Greater Lagos Phase II” is billed for completion by
the first quarter of 2004. It would cover industrial areas such as
Ojota, Isolo, Oshodi, Ilupeju, Matori, Amuwo-Odofin, Iganmu and
Apapa.
Newswatch
was told that when the greater
Lagos
industrial area project is fully in place, it
would save industries more than N480 billion in energy bills
during the initial franchise period of 20 years at the present
energy cost. It is also expected to generate more than N360
billion or $3 billion in foreign exchange to the Federal
Government from displaced liquid fuels.
GasLink Nigeria Limited,
a wholly Nigerian-owned company, was established in 1988 to
promote natural gas distribution and utilisation in
Nigeria
. Because of the absence of enabling
environment aimed at promoting private sector participation in
natural gas distribution, it embarked on the provision of
consultancy, technical and engineering services focusing on
compressed Natural Gas, CNG, and gas air conditioning.
But, the granting of gas
distribution franchise to Unipetrol Nigeria PLC and Shell Nigeria
Gas Limited by the Federal Government through the Nigeria Gas
Company, rekindled its hope. A synergy evolved between Unipetrol
and Gaslink in February 1999, when Unipetrol assigned its
distribution franchise to Gaslink after it had acquired 40 percent
equity in Gaslink.
The distribution right
covers the Greater Lagos Industrial Area made up of Ikeja, Ojota,
Isolo, Oshodi, Ilupeju, Matori, Amuwo-Odofin, Iganmu, Apapa, and
adjoining areas, while Shell Nigeria Gas Limited was assigned
Agbara and Otta industrial areas in
Ogun
State
.
Newswatch Volume 36 No 22 December 2, 2002
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