GCISavannah Petroleum's Accugas secures first IGSA in over five years
The Niger and Nigerian-focused group said that its Accugas business, of which the company acquired an 80% interest in following the completion of the Seven Energy Transaction, had secured its first IGSA in over five years.
The agreement with FIPL, an affiliate of international energy conglomerate, Sahara Group, relates to the provision of gas sales to the FIPL Afam power plant which currently holds a power generation capacity of 180MW, Savannah noted.
As a result of the deal’s commercial terms, Savannah anticipates increased profitability across Accugas’ portfolio, whilst sale volumes, revenues and cash flows are also expected to rise with no added capital expenditure.
The FIPL will foresee the supply of gas by Accugas to FIPL Afam to increase its existing gas supply on an interruptible basis for an initial term of one year, and this term may increase subject to mutual agreement.
The supply of gas will reach a maximum daily nominated quantity of 35 million standard cubic feet per day, about 5.8m barrels of oil equivalent, and will be produced by Uquo, the statement outlined.
Shares in Savannah Petroleum were trading 2.98% at 18.33p on Friday morning.
Commenting on the deal, Kola Adesina, Group Managing Director of Sahara said, “It is another demonstration of our commitment to bringing energy to life by facilitating economic activities through our power business."
Andrew Knott, CEO of Savannah expressed his delight at partnering with Sahara, acknowledging the group’s “notable experience” in African energy projects.
As the largest privately owned vertically integrated power company in Sub-Saharan Africa, Sahara operates in over 42 countries across Africa, the Middle East, Europe and Asia.
Knott said he suspected the IGSA was the first of several new gas sales agreements to be signed over the course of 2020.
He added, “Through Accugas, we aim to be seen as the gas supplier of choice to the power sector in Nigeria.”
Currently, Accugas sells to three African-based customers, for an aggregate maintenance-adjusted 2020 ‘take or pay volume’ of 141.4 million standard cubic feet per day.
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