Plans to reduce dependence on oil has begun, as the Nigerian National Petroleum Corporation (NNPC) and Seplat Petroleum Development Company Plc are planning to raise $700 million for a joint gas project scheduled to start production next year.
The plant will be developed and built in Imo State and operated by ANOH Gas Processing Company, which is owned by Seplat, and the Nigerian Gas Company, a unit of the NNPC.
According to report, the project, known as Assa North-Ohaji South, is one of seven to boost gas production in Africa’s biggest crude producer. Nigeria had been encouraging investments in gas infrastructure to improve supplies to power companies.
Investment in gas infrastructure has also received support from the Government due to its diversification programme which intends to reduce the influence of oil on the Nigerian economy.
How they intend to raise the capital
Seplat‘s Chief Executive Officer, Austin Avuru, said both Seplat Petroleum and NNPC will provide 60 percent of the funds as equity, while ANOH Gas Processing will source the balance as debt.
He added that NNPC and Seplat Petroleum have already committed $100 million for the project capital.
“BOTH PARTIES ALREADY HAVE EACH CONTRIBUTED $100 MILLION IN EQUITY.
“THERE WILL BE ANOTHER EQUITY INJECTION AND AT THE BACK END OF IT WILL BE DEBT.’’
According to the Chief Executive, ANOH will target local customers and has the capacity to double production. However, Avuru said it depends on domestic demand and the availability of feeds, including third-party gas.
The plant has an initial capacity of 300 million standard cubic feet per day, and will process wet gas from the unitized upstream fields at OML 53 and OML 21.
It is scheduled to begin production by the last quarter of 2020 and the first supply is targeted in 2021.
About Seplat Petroleum
Seplat Petroleum is an independent indigenous Nigerian upstream exploration and production company with a focus on Nigeria.