Transcorp’s Ezeafulukwe on what Nigeria’s gas transportation network code means for the power sector
Nigeria's power sector faces many challenges from capacity complications to liquidity issues which have led to renewed calls by the Senate for a review of the power sector privatisation process. But how will the Gas Transportation Network Code which expected to come on board in August impact Nigeria's power sector's delivery going forward? Christopher Ezeafulukwe, MD & CEO of Transcorp Power joins CNBC Africa for more.
Wed, 29 Jul 2020 11:36:49 GMT
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AI Generated Summary
- The Gas Transportation Network Code will provide unrestricted access to gas infrastructure, promoting fairness and efficiency in the sector.
- Transcorp Power stands to benefit from enhanced gas transportation agreements and improved planning and operations.
- Cost-reflective tariffs and service improvements are key to addressing liquidity challenges and ensuring the sustainability of the power sector.
Nigeria's power sector has been grappling with a myriad of challenges, from capacity complications to liquidity issues, prompting calls from the Senate for a review of the privatization process. The introduction of the Gas Transportation Network Code, set to come into effect in August, is poised to revolutionize the delivery of Nigeria's power sector. Christopher Ezeafulukwe, MD & CEO of Transcorp Power, sheds light on the significance of this code and its implications for the power sector. The Gas Transportation Network Code aims to provide unrestricted and open access to gas infrastructure for all players in the sector, ensuring fairness and efficiency. Once implemented, operators and shippers will benefit from streamlined access to gas infrastructure, enabling better planning and more efficient operations. Transcorp Power stands to gain significantly from this code, as it will enhance their gas transportation agreement and provide contractually obligated gas delivery services. This will ultimately lead to improved planning, enhanced generation, and a more stable supply of gas for power generation. Additionally, the code mandates the use of a balancing mechanism to address gas shortages or surpluses, enabling better coordination and allocation of resources. On the acquisition front, the Afam Genco acquisition by the Transcorp consortium is progressing well, with negotiations nearing completion. While specific details are confidential, the transaction is expected to be finalized soon, marking a significant milestone for the company. Looking ahead, the power sector continues to grapple with tariff issues, with calls for cost-reflective tariffs to ensure sustainability and address liquidity challenges. Implementing cost-reflective tariffs will help cover the true cost of power production and distribution, ensuring a sustainable value chain. Alongside tariff adjustments, service improvement obligations will be enforced to enhance quality and reliability for end-users. By aligning these initiatives, the power sector aims to achieve self-sustainability and provide value for all stakeholders. Despite the hurdles that remain, the sector is poised for transformation with the Gas Transportation Network Code and ongoing efforts to address tariff and service issues. The future of Nigeria's power sector looks promising, with stakeholders working towards a more efficient and sustainable energy landscape.