NLNG Warns N3.3 Trillion in Unpaid Gas Invoices Is Closing Valves to Power Plants

Leye Falade, managing director and chief executive of Nigeria LNG, warned at the Harvard Business School Association of Nigeria Energy Conference in Lagos that unpaid invoices of about N3.3 trillion owed to gas suppliers for power plants are undermining electricity supply, The Guardian Nigeria reported on 14 October. Nigeria holds about 215 trillion cubic feet of proven gas reserves and aims to raise production to 12 billion cubic feet a day and attract USD 60 billion of investment by 2030, targets he said will fail without payment guarantees and predictable regulation.

Falade said roughly 70 per cent of grid electricity comes from gas, yet gas-fired stations received less than half the gas they needed in February. When invoices go unpaid, suppliers cut deliveries, plants idle and factories turn to diesel. He argued that government interventions on market arrears must be followed by a payment system built into the design of the market so that delivered gas is paid for.

He also said NLNG supplied a record 500,000 metric tonnes of cooking gas to Nigerian homes last year, about a third of national need, and had raised year-to-date plant utilisation to about 81 per cent from around 60 per cent over the prior two years. Cooking gas sold to terminal operators at N800 to N900 per kilogramme had reached as high as N2,400 in the retail market, though prices have since fallen about 39 per cent from their June peak.