LONDON (Alliance News) - Victoria Oil & Gas PLC Wednesday said its subsidiary Gaz du Cameroun SA has increased its supply of gas being transported to gas-to-power customers in Douala, Cameroon, but has decided to outsource development of its gas pipeline, which has hit further delays.
Victoria Oil & Gas shares were down 12% to 1.52 pence, putting it amongst the top ten AIM All-Share fallers on Wednesday.
The emerging African energy utility company said it has made a strategic change to its pipeline and network strategy in the West African country, deciding to outsource all trenching, horizontal drilling and pipe-laying work on a fixed price per metre laid.
The company has signed a new contract for the process with Britanica HDD International and said it is progressing new pipelines.
In October 2013, the company announced that its gas pipeline in Cameroon was scheduled to pass under the Wouri river in the fourth quarter 2013 but was being held back due to difficulties achieving approval for its Environmental Impact Assessment.
The company received all necessary permits for the process in April this year and said at the time that completion of the crossing was expected by the end of June.
However, the company said work on the crossing at the Wouri river will now be completed by Britanica and is not set to start until July following delays in receiving some required parts.
Victoria Oil & Gas said key parts have now been set up for the Wouri crossing, and equipment is currently undergoing commissioning and testing. It added that the pontoon to carry the pipe on the river is on station, and the pipe is in place ready to commence welding.
The company also said Wednesday that its subsidiary Gaz du Cameroun supplied an average of 4.2 million cubic feet per day of average in the last five day commercial week with a daily peak of 4.5 million cubic feet per day.
The number represents a 30% increase on its April figures which were 3.2 million cubic feet per day.
However, the company did note that including the weekend, when it sees less consumption, the average was 3.9 million cubic feet per day.
"Today's announcement is a milestone for the company, as we see a significant increase in consumption rates from both thermal and power business units," Chairman Kevin Foo said in a statement.
The company said that at the end of June it had connected six 1.5 megawatt units at three customer sites in Douala, adding new supply rates. It added that it has now also connected Socapursel, a food manufacturing business, to supply gas for thermal use in its industrial boilers.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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