Kunle Kalejaye 23 February 2016, Sweetcrude, Lagos – Seven Energy says its $100 million new equity capital will enhance its liquidity to complete existing projects to boost gas supply to Nigeria’s domestic market.
Seven Energy’s $100m equity capital to boost gas delivery
The new equity will, specifically, aid the completion of the company’s ongoing gas pipeline project, expected to integrate its existing pipelines in the south east of Nigeria over the next few months.
When completed, Seven Energy will own and operate a flexible gas transportation network which reaches from Ukanafun and Ikot Abasi in Akwa Ibom State to Calabar, Cross River State.
The company stated in a statement that the completion of the projects would see it delivering more gas to Nigeria’s growing domestic market for power generation and industrial consumption.
“Seven Energy’s total investment in gas production, processing and distribution infrastructure is over US$1 billion,” the statement noted, adding that the company is currently delivering over 110 million standard cubic feet per day, mmcfpd, of gas to three power stations, a cement plant and a fertiliser factory, and is the leading integrated gas company in south east Nigeria.
Seven Energy forecast that gas supply to Alaoji, Calabar and Ibom power plants would increase to 200mmcfpd when the power plants and electricity transmission infrastructure are completed.
Seven Energy’s Chief Executive Officer, Phillip Ihenacho, said of the equity investment: “I am pleased by the continued support shown by our leading shareholders and the vote of confidence in our business plan demonstrated by the investment from the IDB (Islamic Development Bank) Infrastructure Fund II.
“Seven Energy is now established as a significant participant in the rapidly developing Nigerian gas market. Our gas deliveries have more than trebled during the course of 2015, and are currently running in excess of 110mmcfpd.
“This new funding enables us to complete our current development phase, enhancing our pipeline network which will be capable of transporting 600 MMcfpd of gas to the growing regional market.”
The new equity, according to the company, comprises of $50 million from existing shareholders of the group, including Temasek, Petrofac, Capital International Private Equity, Standard Chartered, International Finance Corporation and IFC African, Latin American and Caribbean Fund, by way of an open offer and $50 million invested by the IDB Infrastructure Fund II, sponsored by the Islamic Development Bank and other institutional investors.
The IDB Infrastructure Fund II, with a target fund size of $2 billion, invests in infrastructure opportunities across Asia, the Middle East and Africa.