By Victoria Onehi
Savannah Energy PLC, has announced that the Company’s 80% indirectly owned subsidiary, Accugas Limited, has entered into a Natural Gas Sales and Purchase Agreement with Amalgamated Oil Company Nigeria Limited (“AMOCON”) for gas produced in the OML 156 sole risk petroleum lease area, for onward sale to its customers.
Accugas focuses on the marketing, processing, distribution and sale of gas to the domestic Nigerian market. In 2022,
Savannah Energy under the terms of the NGSPA, Accugas has agreed to purchase up to 20 MMscfpd of gas from AMOCON over the course of the next ten years. The cost of connection to Accugas’ infrastructure has been borne by AMOCON, with the gas being delivered from a new AMOCON-owned 140m pipeline connecting AMOCON’s Early Production Facility (“EPF”) to Accugas’ existing pipeline network.
CEO Savannah Energy,Andrew Knott, said:i “Since we announced our intention to acquire our ownership interest in Accugas in 2017, Accugas has recorded six consecutive years of growth in Total Revenues2 at a compound annual growth rate of 21%. We are now contracted to supply gas to up to 24% of Nigeria’s thermal power generation capacity (up from 10% at the time of acquisition) as well as key petrochemical and cement factories. We are clearly performing a critical service to the Nigerian economy.
By providing a commercial route to market for otherwise stranded gas resources, the deal with AMOCON represents a new source of growth for Accugas. This deal has the potential to serve as a template for the commercialisation of other stranded gas resources in South East Nigeria which represents a potentially significant opportunity for Accugas.”