(Alliance News) - Savannah Energy PLC on Friday said it has struck a seven-year gas sales agreement with Mulak Energy Ltd.
Under the contract, the company's unit Accugas will supply energy from Savannah's majority-owned Uquo field in Nigeria for an initial two years, though on an interruptible basis. The final five years of the pact will be on a firm contract basis, the Nigeria and Niger-focused energy firm said.
"During the interruptible gas delivery period, Mulak is able to nominate a maximum daily quantity of up to 2.5 million standard cubic feet of gas per day. Volumes in the firm delivery period will be agreed by the parties before the end of the Interruptible gas delivery period," Savannah added.
"The GSA is priced to reflect Mulak's status as an industrial customer; Accugas, therefore, expects to see its weighted average gas sales price realisation increase as a result of this contract, without the need for any incremental capital expenditure beyond our previously announced plans."
Mulak is part of Egyptian conglomerate Mansour Group, which has operations in 100 countries.
Savannah Chief Executive Officer Andrew Knott said: "We are delighted to announce this new gas sales agreement with Mulak Energy and the Mansour Group. This recognises, Accugas' status as the most reliable supplier of natural gas in Nigeria."
Savannah shares were up 6.4% at 17.45 pence each in London on Friday morning.
By Eric Cunha; ericcunha@alliancenews.com
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Savannah Energy (SAVE)