Oritsegbubemi Omatseyin
Lagos — Accugas an 80% indirectly owned subsidiary of Savannah Energy PLC, the British independent energy company focused on the delivery of projects that matter, has announced that it has entered into a natural Gas Sales and Purchase Agreement with Amalgamated Oil Company Nigeria Limited, AMOCON, for gas produced in the OML156 sole risk petroleum lease area, for onward sale to its customers.
Accugas focuses on the marketing, processing, distribution, and sale of gas to the domestic Nigerian market. In 2022, Accugas processed and transported an average of 145 MMscf/d of gas through its pipeline network, with all gas sourced from Savannah’s 80% indirectly owned Uquo gas field.
Gas is processed at Accugas’ 200 MMscf/d Uquo central processing facility (“Uquo CPF”) for onward transportation to customers through its c.260km, up to c.600 MMscf/d transportation capacity pipeline network.
The Natural Gas Sales and Purchase Agreement (NGSPA) with AMOCON represents the first time that Accugas will be supplying gas to its customers that has not been produced from the Uquo gas field. Gas purchased from AMOCON does not require processing by Accugas and therefore does not utilize available capacity at the Uquo CPF.
Under the terms of the NGSPA, Accugas has agreed to purchase up to 20 MMscfpd of gas from AMOCON over the next ten years. The cost of connection to Accugas’ infrastructure has been borne by AMOCON, with the gas being delivered from a new AMOCON owned 140m pipeline connecting AMOCON’s Early Production Facility (“EPF”) to Accugas’ existing pipeline network.
Under the terms of the new GSPA, all capital expenditure required for the AMOCON EPF-to-Accugas pipeline Is borne by AMOCON and Accugas has not incurred any additional capital expenditure concerning this project. The contract is already operational and the gas supply to Accugas has stabilized at approximately 20 MMscf/d.
Andrew Knott, CEO of Savannah Energy, said “Since we announced our intention to acquire our ownership interest in Accugas in 2017, Accugas has recorded six consecutive years of growth in Total Revenues2 at a compound annual growth rate of 21%. We are now contracted to supply gas to up to 24% of Nigeria’s thermal power generation capacity (up from 10% at the time of acquisition) as well as key petrochemical and cement factories.”
“We are performing a critical service to the Nigerian economy. By providing a commercial route to market for otherwise stranded gas resources, the deal with AMOCON represents a new source of growth for Accugas. This deal has the potential to serve as a template for the commercialization of other stranded gas resources in Southeast Nigeria which represents a potentially significant opportunity for Accugas.”
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