Lagos — Savannah Petroleum, a UK independent oil and gas company, has increased its foothold in Nigeria through the recent signing of a gas sales agreement, IGSA, between Accugas, a company it has stake in, and First Independent Power Limited, FIPL.
Savannah got a stake in Accugas after it recently acquired Nigerian oil and gas company Seven Energy, which has Accugas as a wholly owned subsidiary.
Under the new deal, Accugas is to provide gas to the FIPL Afam power plant in Rivers State.
The FIPL is an affiliate company of Sahara with operations in over 42 countries across Africa, the Middle East, Europe and Asia. Afam has a current power generation capacity of 180MW.
The FIPL IGSA envisages gas from Accugas to augment existing gas supply to FIPL Afam power plant on an interruptible basis for an initial term of one year with room for extension upon mutual agreement.
In a statement, FIPL said securing an additional gas supplier to the Afam plant was another demonstration of FIPL’s commitment to its vision of being a stable power generator significantly contributing to Nigeria’s national grid.
Andrew Knott, CEO of Savannah Petroleum, said: “I am delighted to announce the IGSA with FIPL, representing the first new gas sales agreement that the Accugas business has signed in over five years”.
“We look forward to partnering with the Sahara Group, who have notable experience with energy and infrastructure projects in Africa. We are confident that this will be the first of several new gas sales agreements signed over the course of 2020 and, through Accugas, we aim to be seen as the gas supplier of choice to the power sector in Nigeria,” he added.
Accugas currently sells gas to three customers, Calabar Nigerian National Integrated Power Plant, National Integrated Power Project (a Niger Delta Power Holding Company-owned power station), the Mfamosing Cement Plant (located in Cross River State, owned by Lafarge Africa Plc) and Ibom Power (a power station owned by Akwa Ibom State), for an aggregate maintenance-adjusted 2020 take or pay volume of 141.4 mmscfd.
The commercial terms of the FIPL IGSA are expected to augment the weighted average profitability of the Accugas portfolio while Accugas’ sales volumes, revenues and cash flows are expected to increase with no incremental capital expenditure.
Kola Adesina, Group Managing Director, Sahara Power Group said:
“We are delighted to be working with Accugas on this project. It is another demonstration of our commitment to bringing energy to life by facilitating economic activities through our power business. We remain resolute in our vision to enhance access to sustainable energy in Nigeria and ultimately, across Africa.”