by Alex C
Seplat Petroleum Development Company Plc has announced the signing of a major gas sale and supply contract worth $300 million which will leverage NPDC/Seplat investment in gas domestication business. This development, industry experts say will boost electricity supply in the country with Seplat’s Oben set to supply the Azura-Edo Independent Power Plant with the project’s fuel-gas requirement.
Austin Avuru, CEO of Seplat, said that the domestic gas space is a huge opportunity for the company as the privatization of the domestic power industry, coupled with a massive government initiative to promote the use of natural gas. This development, Avuru noted has driven investment in gas infrastructure development and power generation.
The Nigerian government’s Gas Master Plan is designed to utilize the country’s enormous gas reserves to boost industrialization and electrification. Currently, a gas industrial zone including a fertilizer plant and a petrochemical facility is being built in the Sotuh West of the country.
Given these positive developments, Avuru reaffirms that a ‘fifteen‐year gas supply contract for power plants will underpin the expansion of Seplat’s domestic gas business.
“This will also promote the company’s organic growth, which is to continue to apply the best technology and human capital that Seplat has to drive production and reserves growth in current assets and vigorous growth of our gas domestication business,” Avuru pointed out.
The investments by Azura and Seplat constitute over a $1 billion of local and international financing into the Nigerian gas and power sector. The Azura‐Edo IPP comprises a 450megawatts open cycle gas turbine power station; a short transmission line connecting the power plant to a local substation and a short underground gas pipeline connecting the power plant to the country’s main gas‐supply.
This represents the first phase of a 1,500 megawatts power plant facility. The first phase of the plant, which is targeted to come on stream in 2017, is forecast to create over 1,000 jobs during its construction and operation.
Azura‐Edo is also the first Nigerian power project to benefit from the World Bank’s recently developed, ‘Partial Risk Guarantee’ structure, specifically created to meet the developing needs of emerging markets world‐wide.
With a significant additional investment of $300m in its gas business, Seplat is poised to facilitate Azura‐Edo IPP actualize its capacity to boost power supply and the country’s economy.
Seplat Petroleum Development Company Plc, operator of the NPDC/ SEPLAT Joint Venture, listed simultaneously in Nigerian and London Stock Exchanges in April 2014. With an average gross gas production of 99 million standard cubic feet per day in 2013, Seplat projects to triple its gas production by end 2016 through massive investments in processing and delivery infrastructure.
Currently, the company is also targeting gross operated oil production of 85 millon barrels per day (mbpd) from its existing assets by the end of 2016.