By Destiny Day
Baring any unforeseen situation, Seplat Petroleum Development Company Plc’s $700m Assa North /Ohaji South (ANOH) gas and condensate field project investment will help ease the intractable power challenge that has brought many businesses in that part of Nigeria to their knees at completion.
More significantly, the project on kick-off, will go a long way in contributing in addressing Nigeria’s deficit in thermal power delivery around the Eastern part of the country in particular.
Hope rising and excitement best describe the feeling among residents and nearby communities where the project straddles OML 53 (Seplat 40 per cent working interest and operator) and OML 21 (Shell JV).
At a recent presentation tagged: ‘Stability, Performance, Growth’ three persons(two from Seplat and one from AGPC) provided the audience with comprehensive information on the company’s existing gas business, market outlook and anticipated ANOH growth trajectory.
Anoh Gas Processing Company (AGPC), an incorporated joint venture (IJV) between Seplat and the Nigerian Gas Company manages the ANOH gas processing project.
AGPC is saddled with the task of developing a 300 Mscfd midstream plant on OML 53 to process future wet gas production from the upstream unit.
Chief Executive Officer, Seplat, Austin Avuru; Chief Financial Officer, Seplat, Roger Brown were at the forum with Managing Director, AGPC, Mrs Yetunde Taiwo, also in attendance.
Taking the audience through the huge gas deposit in Africa, in his address, Avuru eloquently said Nigeria holds 37 per cent of total proved gas reserves on the continent, and that majority is concentrated in the Niger Delta.
He said Domestic Supply Obligation (DSO) price has increased to commercial levels and that non- DSO prices are determined on a willing buyer/willing seller basis; opening up new vista of growth for the Seplat’s gas business.
Avuru said: “Nigeria is one of the largest economies in Africa with a population today in excess of 201 million; 50 per cent are urban dwellers while 62 per cent is less than 25 years in age and 93 per cent is less than 55 years in age.
“Projected to grow to a population of 450 million people by 2050 (highest population growth in Africa) and become the third most populated country globally (behind only China and India). This will spur a high demand from power industries and other commercial enterprises.
“Current capacity deficit in thermal power generation provides immediate headroom to place additional gas volumes (significant installed but non-operating generation capacity seven per cent royalty on gas revenues as opposed to 20 per cent on oil production”.
The Seplat CEO added that government’s ambition of using gas as an enabler for energy independence, industrial development, commerce, environmental and social sustainability is a real GDP growth driver for Nigeria, and would reduce production cost with reduced power costs to businesses, raise standard of living, develop human capital, and reduce environmental degradation and health risks.
Speaking on the AGPC, Brown noted that a special purpose company formed to raise $420m of equity to de-risk the project; of which equity investors – Seplat and Nigeria Gas Company- granted equal share 50:50 in AGPC.
He illustrated that “it is essential to correlate a company’s funding model and business model citing the company’s proactive pay back of its equity debt in the early years as a good example.”
Brown said equity and debt are to be scaled in line with final project cost while maintaining a target debt:equity ratio of 60:40.
On the project funding, Brown said local banks were on board including but not limited to: UBA, Zenith, Stanbic, Fidelity, FCMB, FBN, Access Bank, Union Bank and Nova.
His words: “International lenders include but not limited to: SCB, RMB, Standard Bank, BHGE, and Nedbank.”
According to Mrs. Taiwo, AGPC schedules synchronizes with Seplat upstream development plan.
She added: “ANOH is unitized 50:50 across the two blocks. Shell is the operator of the upstream unit. AGPC shall deliver a 300 MMscfd midstream plant on OML 53 to process future wet gas production from the upstream unit.”
