By Chioma Obinagwam
Seplat Petroleum Development Company Plc has identified the Assa North-Ohaji South (ANOH) gas processing project as very bankable and capable of boosting Nigeria’s domestic gas supply significantly.
A Seplat team led by the company’s chief executive officer, Mr. Austin Avuru, gave an in-depth presentation on the company’s gas business to investors, sector and financial analysts during its 2019 Capital Markets Day at the London Stock Exchange, London, recently.
Seplat’s chief financial officer, Roger Brown’s Investor Relations team organised the forum to apprise investors of the company’s gas business with emphasis on the ANOH gas processing project.
In a presentation titled ‘Stability, Performance, Growth’ the team of six presenters provided the audience with comprehensive information on the company’s existing gas business, market outlook and anticipated ANOH growth trajectory. The ANOH gas processing project is managed by Anoh Gas Processing Company (AGPC), an incorporated joint venture (IJV) between Seplat and the Nigerian Gas Company. AGPC shall develop a 300 Mscfd midstream plant on OML 53 to process future wet gas production from the upstream unit.
During his introductory presentation, Avuru highlighted that the ANOH gas processing plant will be the first stand-alone midstream joint venture business between the Nigerian National petroleum Corporation (NNPC) and a company in the private sector.
With the ANOH project, Seplat aims to be the largest supplier of gas to the domestic market. The Seplat CEO added that: “By the time we commission the ANOH project, we will be able to produce 850 Mscfd.
“Overall, the gas business was not attractive in 2010 and some years after. Seplat however took a conscious decision to invest in the gas business upon the price of gas inching up as ‘willing buyer willing seller’ commercial terms became possible. The company is uniquely situated within existing gas pipeline network, and therefore leveraged on this to significantly expand its Oben gas plant. The revenues from the expanded Oben gas plant has been impressive motivating the company to seek further investment in gas.”
He explained that the company’s gas is for the domestic market, quipping that Nigeria has a notable population which is projected to continue to grow to 450 million people by 2050. “This will represent highest population growth in Africa, and Nigeria being the third most populated country globally behind China and India. Evidently, the current capacity for electricity generation cannot be adequate,” he said.
“Thus, Seplat has strategically positioned itself ahead of that opportunity and with projected demand for gas and improved fiscal regime, there is a compelling case for gas. Displacing diesel in Nigeria’s environment is a priority for the company. Currently Seplat gas accounts for 30 to 35 per cent of power generated and the company is determined to continue the lead in this area.”
“For Seplat, our gas business is a national project. As a result, facilitating gas to power and gas to industry have become critical for the company.
The Operations Director, Seplat, Mr. Effiong Okon, complimented the CEO’s discourse on the company’s gas business with insights on the Oben gas plant. He stressed that the successful delivery of Oben midstream plant expansion will be replicated at ANOH, pointing that as demand for gas continues to outstrip available supply, Seplat will continue to be strategically positioned to capitalise on future expansion of the gas business.
The General Manager, Seplat, Okey Mba, further highlighted the business case for the company’s gas business and demonstrated how the company would derive and deliver more benefits with its gas business. He maintained that the economics of switching from diesel to gas fired power generation are compelling.
The Managing Director of AGPC, Yetunde Taiwo and the Project Manager Doug Kinloch, in separate interviews, provided comprehensive information on the ANOH project, highlighting project development overview, contracting and Local Content strategy, regulatory compliance, the commercial structure, community management and project execution schedule, amongst others.
The CFO, Roger Brown provided highlights on the funding structure showing that the company proactively is addressing debt investors and funding considerations upfront to ensure success of the project. He added that the company has received significant show of interest with major key stakeholders, both from international and local banks, amongst others.
Responding, some members of the audience commended the company on its foresight with its gas business.
The CEO in his closing remarks stated that: “The market gas price remains strong and the long term outlook for gas in Nigeria and the regional market remain strong. Seplat is participating in major national development with its gas business, and the company is delighted to, through its gas business, deliver major national priority while earning revenue.”
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