(Alliance News) - Savannah Petroleum PLC on Friday said Accugas has signed a new gas sales deal with First Independent Power Ltd, adding a new customer.
Accugas, which Savannah holds an 80% interest, is owner and operator of the Uquo gas central processing facility in Nigeria, as well as a pipeline network. It already sells gas to Ibom Power, the Calabar Nigerian National Integrated Power Plant, National Integrated Power Project, and the Mfamosing cement plant.
The new interruptible gas sales agreement will see Accugas supply up to 35 million standard cubic feet per day of gas from Uquo to the FIPL Afam power plant. This is aimed at augmenting FIPL Afam's existing supply of gas "on an interruptible basis for an initial term of one year" though this may be extended "upon mutual agreement".
It is predicted that the commercial terms for the deal with First Independent Power will "augment the weighted average profitability of the Accugas portfolio while Accugas' sales volumes, revenues and cash flows are expected to increase with no incremental capital expenditure."
Savannah said Accugas it making "good progress" in securing other possible new customers, with more updates "in due course".
Andrew Knott, Savannah's chief executive, said: "I am delighted to announce the [interruptible gas sales agreement] with [First Independent Power], representing the first new gas sales agreement that the Accugas business has signed in over five years, and we look forward to partnering with the Sahara group, who have notable experience with energy and infrastructure projects in Africa. We are confident that this will be the first of several new gas sales agreements signed over the course of 2020 and, through Accugas, we aim to be seen as the gas supplier of choice to the power sector in Nigeria."
Shares in Savannah were up 1.1% at 18.00 pence in London on Friday afternoon.
By Anna Farley; annafarley@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.