Geometric Power reviving hope in Abia’s $12bn economy – energy economists

…But gas supply still a hurdle for $800m power facility

Ben Eguzozie

Geometric Power, Aba, an $800 million electricity generating and distribution facility, is reviving hope in Abia State’s $12 billion economy, considering its milestone in generating and supplying nearly 20 hours of electricity, which can drastically wipe off significant chunk of company’s overheads – say energy economists.

For instance, reports said energy costs account for between 30% and 40% of overhead costs of Nigerian companies. In 2023, alone top listed companies in Nigeria saw a combined energy bill rise to N221 billion for the first half of the year (H1 2023). Also, energy costs of three cement manufacturers listed on the Nigerian Exchange Group (NGX) accounted rose 140% to N525.78 billion in the first half of 2024 (H1 2024). Whereas, Dangote and BUA cement companies saw rise in their energy costs to N238 billion in Q1 of 2024.

Energy economists indicate that since the commissioning of the 188 megawatts Geometric Power plant in Aba and the embedded distribution firm, the Aba Power Electric Company, has signaled Aba’s growing status as an industrial and economic centre.

On 21 August, the British High Commissioner to Nigeria, Richard Montgomery led a delegation to the $800 million Aba Independent Power Project built by the Geometric Power group.  The British envoy noted that Geometric Power was reviving hope in Aba’s economy, coupled with what he described as considerable support the power facility has been receiving from the Abia State government under Governor Alex Otti.

However, reports said the industrial city was yet to attain uninterrupted power supply due to inadequate natural gas supply to the Geometric Power plant which built a 27-kilometre gas pipeline from Owaza in Ukwa West Local Government Area of the state to the Osisioma Industrial Estate in Aba where the power firm is located.

Geometric Power, founded by Barth Nnaji, Nigeria’s former power minister, signed a gas supply agreement with the Shell Petroleum Development Company (SPDC) for the supply of 40 million standard cubic feet of gas (mscf) for its four turbines built by General Electric (GE) of the U.S, the world’s biggest electricity equipment manufacturing firm. Each GE turbine used by Geometric Power can generate 47 MW, and each needs 10 mscf of gas to fire. Three turbines have been installed, implying that 30 mscf of gas is required for their operation.

Aba and its environs currently do not need more than 100 MW of electricity, signifying that Geometric Power does not require more than 20 mscf of gas to fire two turbines to produce 94 MW. Yet, it signed for 40 mscf in 2009.

Dike Ejike, a mechanical engineer and an Abuja-based business and engineering consultant, said the reason why Geometric Power signed the 40 mscf gas supply agreement, is to cater for third turbine, which is meant to assist the rest of the country by delivering some 47 MW to the national grid. A fourth turbine will be installed when the need arises, bringing the total natural gas requirement for the 188 MW to 40 mscf of gas.

Shell, like some other international oil companies (IOCs) such as ExxonMobil, Eni, Chevron, and TotalEnergies, has abandoned onshore and shallow offshore operations in Nigeria, in what has been described as large-scale Nigeria divestment gale by majors, totaling around £17 billion since 2006. The IOCs adduce their exits to industry-level oil theft, attacks by militants, and community issues.

Shell was operating OMLs 11 and 17 where gas is supplied to the 188 MW Geometric Power Plant, has since sold its interests to local operators. The OML 17 local operator is, unfortunately, having challenges affecting its ability to provide gas to the electricity-generating plant. Ejike revealed that the local operator has not been able to provide more than 10 mscf gas to Geometric Power, a consequence that Geometric Power has been augmenting the electricity it has been generating and supplying to Aba people by importing power from the Niger Delta Power Holding Company (NDPHC) so as not to disappoint its customers.

However, the Abia State government and the Federal Government are working closely with Geometric Power and the Nigerian National Petroleum Company Limited (NNPCL) to get a reputable multinational firm to provide sufficient gas to Geometric Power before the end of September.

Once the gas supply issue is resolved, Aba will finally achieve the status of the first city in the nation to have constant, quality, and affordable electricity. This attainment will have significant socioeconomic implications for the whole of Nigeria, one energy economist told our correspondent in Port Harcourt.