RE: Price of Gas7 Oct 2021 17:25
From Bowleven March 2021 interim results which says it all about the huge potential- all chat and no action to date - and to quote The Smiths ' how soon is now' - should be our motto!
Commercial developments
Domestic Gas sales
The Government of Cameroon has stated its preference for a mixed hydroelectricity/gas power
thermal electricity generation system with roughly 70% of electricity generation supply coming from
the hydrothermal sector. To this end the Government launched an expression of interest in early 2020
for a contract under which a third party would build and operate a 350 MW power plant close to
Limbe. Whilst we understand several bids were submitted by the end of August 2020, there has not
been any further public comment. Encouragingly, SNH informed us in mid-2020 that they and the
Government seek to utilise Etinde gas to supply this facility.
On the previously approved Aksa 150 MW thermal power plant based at Bekoko, close to the city of
Douala, we understand there have been detailed discussions between Aksa, SNH, ENEO and Victoria
Oil and Gas plc (‘VOG’). We understand that an electricity price may have been agreed and that some
commercial discussions have been undertaken on matters such as gas demand and pipeline tariffs. As
part of the Gas Master Plan for the country, SNH have confirmed they will build a pipeline between
Limbe and Bekoko to transport gas purchased from Etinde to supply to the Aksa power plant in
Bekoko and other potential customers in the Port of Douala vicinity. There have been no discussions
on gas supply agreements between us, SNH, Aksa and VOG. We expect these to progress in 2021.
SNH has also indicated that they consider there may be some further supply opportunities that they
are discussing. We believe these may relate to conversion of existing heavy oil fuelled power stations
to gas and other industrial developments. Whilst supply logistics infrastructure, pricing and demand
considerations are likely to be significant in assessing whether these projects can be supplied by
Etinde gas at a commercially viable domestic gas price, we are encouraged by this development. SNH
anticipates the Bekoko and Limbe projects to ultimately require about 70 mmscf/d with each contract
likely to be 20 years in duration.
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