Inadequate gas supply: ALSCON suffers $60m loss

The Aluminium Smelter Company of Nigeria said it had lost about $60m due to inadequate gas supply to its facility at Ikot Abasi, Akwa Ibom State since the facility was restarted in 2008.

According to the company, it is using less than 20 per cent of its production capacity as result of six lengthy disruptions in gas supply.

The Director, Public Relations, ALSCON, Ms. Tatyana Smirnova, who said this in Uyo on Tuesday, explained that the development had led to a complete stoppage of aluminium production, which resulted in long periods of rehabilitation.

This, she explained, was because the disruptions in gas supply, which had been more frequent since the beginning of the year, had forced gas pressure in the gas supply pipeline to drop below the lowest acceptable level 15 times.

Smirnova said, “A key precondition for ALSCON’s successful operation is an uninterrupted supply of natural gas at reasonable prices. Lack of reliable gas supply has become the main obstacle to the development of ALSCON since the restart of production at ALSCON in 2008.

“Since the restart in 2008, ALSCON has suffered six lengthy disruptions in gas supply, which resulted in complete stoppage of aluminium production, losses of about $60m, and long rehabilitation periods. In all the years of its operation, the smelter has utilised less than 20 per cent of its production capacity.”

She added that as of June 21, 2013, the gas pressure in the pipeline had been reduced to zero level, resulting in more losses of over N11m.

Smirnova stressed that unless the Federal Government ensured a quick completion of EsitEket-IkotAbasi pipeline, as a back-up to the current pipeline, the facility would find it hard to survive.

She, however, said no progress had been made in resolving the problem, stressing that the government was not willing to provide the gas pipeline any back-up for the facility. Even if a back-up pipeline were to be constructed, she said it would not be completed before 2016.

The ALSCON PR director also lamented the decline in global aluminium manufacturing. According to her, with current prices below $1,800 per ingot, around 40 per cent of aluminium production is unprofitable.

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