OpeOluwani Akintayo
Lagos — Seplat Petroleum Development Company Plc’s planned $700m Assa North /Ohaji South, ANOH gas and condensate field project, at completion, is expected to contribute significantly in addressing Nigeria’s deficit in thermal power delivery.
The assertion was made by a team of three presenters, Chief Executive Officer, Mr. Austin Nwachuku; Chief Financial Officer, Mr. Roger Brown; and the Managing Director, AGPC, Mrs. Yetunde Taiwo in a presentation titled ‘Stability, Performance, Growth’ where the audience was provided with comprehensive information on the company’s existing gas business, market outlook and anticipated ANOH growth trajectory.
The project straddles OML 53 (Seplat 40 percent working interest and operator) and OML 21 (Shell JV).
The ANOH gas processing project is managed by Anoh Gas Processing Company, AGPC, an incorporated joint venture, IJV between Seplat and the Nigerian Gas Company.
AGPC will develop a 300 Mscfd midstream plant on OML 53 to process future wet gas production from the upstream unit.
Avuru, in his address, said Nigeria holds 37 percent of total proved gas reserves on the continent, adding that the majority is concentrated in the Niger Delta.
According to him, Domestic Supply Obligation, DSO price has increased to commercial levels and non- DSO prices are determined on a willing buyer/willing seller basis; opening up new vista of growth for the Seplat’s gas business.
The Seplat CEO said: “Nigeria is one of the largest economies in Africa with a population today in excess of 201 million; 50 percent are urban dwellers while 62 percent is less than 25 years in age and 93 percent is less than 55 years in age”.
“Projected to grow to a population of 450 million people by 2050 (highest population growth in Africa) and become the third most populated country globally (behind only China and India). This will spur a high demand from power industries and other commercial enterprises.
“Current capacity deficit in thermal power generation provides immediate headroom to place additional gas volumes (significant installed but non-operating generation capacity seven percent royalty on gas revenues as opposed to 20 percent on oil production”.
He said government’s ambition of using gas as an enabler for energy independence, industrial development, commerce, environmental and social sustainability is a real GDP growth driver for Nigeria and would reduce production cost with reduced power costs to businesses, raise the standard of living, develop human capital and reduce environmental degradation and health risks.
The AGPC, according to Roger, is a special purpose company formed to raise $420m of equity to derisk the project; of which equity investors – Seplat and Nigeria Gas Company- granted equal share 50:50 in AGPC.
The Seplat CFO illustrated that it is essential to correlate a company’s funding model and business model citing the company’s proactive payback of its equity debt in the early years as a good example, he said.
Roger said equity and debt are to be scaled in line with final project cost whilst maintaining a target debt: equity ratio of 60:40.
On the funding arrangement, Roger said local banks were on board the project including but not limited to UBA, Zenith, Stanbic, Fidelity, FCMB, FBN, Access Bank, Union Bank, and Nova.
He added: “International lenders include but not limited to SCB, RMB, Standard Bank, BHGE, and Nedbank.”
