The Senate Joint Committee on Gas and Power, Steel Development and Metallurgy on Monday demanded the suspension of the inauguration of the 215MW Kaduna Power Plant following a disagreement with the Ministry of Power, Works and Housing over its plan to run the plant on diesel.
This decision was made at a one-day hearing on the “Urgent need to save the 215 MW Kaduna Power Plant”, chaired by Enyinnaya Abaribe.
The plant, which is already three years behind inauguration schedule, was initially designed to run on gas, when it was inaugurated in 2009; but the ministry changed the parameters to that of a diesel powered plant, PREMIUM TIMES understands.
Running the plant by diesel could cost the country N46 million on a daily basis, with the change in original design causing the cost of power to be higher.
The Permanent Secretary, Ministry of Power, Louis Edozie, who represented the Minister, Babatunde Fashola, in an attempt to defend the change in parameters of the plant from gas-powered to diesel-powered, said that the ministry would inaugurate one of the eight units in January, adding that the unit will run on diesel instead of the gas.
He said the diesel used daily is expected to cost N46 million.
The Chairman of the Committee on Gas, Albert Bassey, expressed dissatisfaction with the reasons proffered by the officials of the Ministry.
“I feel very disappointed. Please tell your minister to stop the process of inauguration because the project cannot be ready even by mid next year.
“We are insisting that it will be cheaper to run the plant with gas and gas is environmentally friendly. Let your Minister know we cannot be taken for granted”, Mr. Bassey said.
The Chairman of GreenVille LNG, Eddy Van Den Broeke, said his company signed a Memorandum of Understanding (MoU) with Kaduna Gas Plant to build storage facilities for the plant at no cost, adding that while the plant will produce a kilowatt of electricity at N79 on diesel, it will produce the same kilowatt at N37 on gas.
He further explained that his company invested$400 million on its gas plant in Roumuji, Port Harcourt, Rivers State.
“In 2014 when the parameters were signed, it was agreed that LNG is most competitive. We have invested $400 million after which people in the ministry decided to change the parameters.
“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”, he said.
He said that besides the functional gas plant, Greenville had imported 250 trucks to evacuate gas to the plant before the change of parameters by the ministry.
Mr. Abaribe insisted that the ministry should put the planned launch on hold to enable the committee embark on further physical examination of the plant.
“We have heard a lot of disturbing things and we have all seen that we have put the cart before the horse. Everyone in this hall today has now seen why we ask questions. We ask questions when things don’t seem to be going the right way.
“You see one price at N79 and the other at N35, why do you go for the higher cost which is not cost effective. If you are going to spend N46 million daily to run a plant and you said it is temporary, that is not effective. If you start one plant and the rest don’t come up in eight years, we need to save this project from becoming another white elephant project”, he said.
Speaking earlier when he declared the hearing open, the Senate President, Bukola Saraki, who was represented by the Senate Deputy Whip, Francis Alimekhena, said it was necessary to examine the cause of the shift from the use of LNG, to diesel to power the plant, adding that the use of LNG is environmentally friendly, much more sustainable and is in line with the charter of the United Nations on Free Energy and Climate Change.
“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, which is 60 per cent higher in cost when compared with gas”, he lamented.
He said the advantages offered by LNG informed the decision of the federal government, through the Nigerian National Petroleum Corporation, NNPC to plan a contract for the construction of the 40x614km Ajaokuta-Abuja-Kaduna-Kano gas pipe line.