Seplat Petroleum Development Company Plc, is projecting at least $261 million in gas revenues annually from its Assa North / Ohaji South (ANOH) Gas Processing Company (AGPC).
AGPC, according to Seplat is an incorporated joint venture (IJV) between Seplat and Nigerian gas Corporation (NGC) to develop a 300 MMscfd midstream plant on OML 53 for the processing of future wet gas production from the upstream unit.
Asides the projected $261 million as annual revenue from its Assa North /Ohaji South (ANOH) gas and condensate field project, Seplat Petroleum Development Company Plc’s planned $700m investment is expected to contribute significantly in addressing Nigeria’s deficit in thermal power delivery, once completed.
Austin Avuru, Seplat’s chief executive stated that the opportunity for expansion in the firm’s gas business is rife as conventional diesel off-grid power generation is expected to be displaced.
Market prices also remain strong, and long term outlook for gas in Nigeria and the regional market remains positive, while the firm’s access to gas infrastructure, positions it to be the leading long term gas supplier of choice for Nigeria.
In a presentation titled ‘Stability, Performance, Growth’ the team of three presenters provided the audience with comprehensive information on the company’s existing gas business, market outlook and anticipated ANOH growth trajectory.
According to the company’s presentation, Seplat aims to leverage on its track record of delivering midtream gas processing expansion projects at Oben. The firm has thus pegged the first quarter of year 2021 as its target for first gas.
Speaking on the long term vision for Seplat’s gas business, Yetunde Taiwo, managing director AGPC explained that the ANOH is expected to connect large scale gas reserves in the Eastern Delta into Nigeria’s main demand centres via Seplat’s Oben hub.
A break down of Seplats’s long term plan indicates that the first phase will comprise 300 MMscfd gas processing plant on OML 53, and accomodate space for future expansion, while experience gained at Oben will be leveraged to derive repeatability gains and optimal configuration.
A final investment decision was taken by Seplat to invest in the ANOH project, as announced in the Company’s 2018 full year results on 6 March 2019.
On funding and reaching milestones set for the business, the company stated that it is considering a funding plan that balances underlying risk with investor appetite.
For the execution of the first gas, Seplat will raise funds in tranches with the first three tranches raised with equity of $200 million, $100 million and $120 million respectively while debt of $280 million will complete the funding requirements.
Management of the oil and gas firm assured that debt facility is expected to amortise over 5-7 years, adding that non-recourse to shareholders beyond $420 million equity injected upfront.
Local banks including but not limited to UBA, Zenith, Stanbic, Fidelity, FCMB, FBN, Access, Union, and Nova have been listed by the company as sources to provide achievable funding timelines. Seplat also mentioned its consideration of international lenders such as SCB, RMB, Standard Bank, BHGE, and Nedbank.
Frontpage September 9, 2019