The Joint Senate Committee on Gas and Power, Steel Development and Metallurgy, headed by Senators Bassey Albert and Enyinnaya Abaribe respectively, have suspended the planned commissioning of the 215 Megawatts Kaduna Power Plant over inconsistencies in the contract implementation.
The Joint Committee gave the order following a one day Investigative hearing on the “Urgent need to save the 215 MW Kaduna Power Plant.”
The power plant, which was inaugurated in 2009 is already three years
behind the scheduled commissioning.
Senate President, Bukola Saraki, who declared the hearing open said that the major objective of the hearing is to diagnose issues and challenges threatening the take-off of the Kaduna power plant and also examine why there is a shift from the usage of gas to diesel as source of fuel for the plant.
Saraki, who was represented by Senate Deputy Whip, Senator Francis Alimekhena, said that the Senate is aware that the Federal Government, through the Nigerian National Petroleum Corporation (NNPC), is on the verge of awarding the contract for the construction of the 40x614km Ajaokuta-Abuja-Kaduna-Kano gas pipe line adding that the Senate was convinced that the use of gas to power turbines is sustainable and environmentally friendly.
He said: “It is surprising that the Federal Ministry of Power, Works and Housing appears to have jettisoned the use of gas to power the Kaduna power plant and instead, opted for the construction of Automobile General Oil (diesel0 tanks for the use of AGO, which is 60
% higher in cost when compared with gas.”
Lawmakers at the hearing said they were unimpressed by the reasons given by the Permanent Secretary of the Ministry of Power, Mr. Louis Edozie who defended the change of the parameters of the Plant from a gas powered plant to diesel powered plant.
Representatives of the Power Ministry led by the Permanent Secretary had told the Committee that the Ministry plans to commission one of the eight units in the plant in January and that the unit would run on diesel.
The diesel fuel is expected to cost the country N46 million per day.
The lawmakers were however alarmed to hear that the cost would be far
cheaper if the plant is to run on gas.
Responding, Chairman of GreenVille LNG, Eddy Van Den Broeke, who led his team to address the Committee, said that the company had a Memorandum of understanding with the Kaduna Gas Plant to build storage facilities for the plant at no cost.
He also stated that while the plant would produce a kilowatt of electricity at N79 if run on diesel, it will produce the same kilowatt of power at N37.
He said that his company had, as a result of the MOU it signed with the Power Plant invested the sum of $400 million on its Gas plant in Roumuji, Port Harcourt.
According to Him: “In 2014 when the parametres were signed it was agreed that LNG is most competitive. We have invested $400million after which people in the ministry decided to change the parametres.
“It will cost $200 million more to use AGO(diesel) because there is no other fuel available that can replace LNG and GreenVille. I would want the ministry to give me one cent of response on this change of theory.”