9 Mar 2015 07:00
Victoria Oil & Gas PLC (AIM: VOG)
9 March 2015
Victoria Oil & Gas Plc
("VOG" or "the Company")
GDC-ENEO Pipeline Installation and Genset Update, Cameroon
· Gaz du Cameroun completes all pipeline and metering installation to Bassa and Logbaba power plants ahead of schedule, meeting all contractual obligations
· Pipeline now "gassed up" and completion certificates issued
· Twenty two Gensets with a combined capacity of 28.6MW arrived at Douala port and cleared customs - sixteen of these (20.8 MW) now onsite at Bassa power station and six (7.8MW) at Logbaba power station
· Seventeen Gensets (22.1 MW) scheduled to arrive in Douala on March 15 2015
· Target date for commissioning of both plants (50MW) remains end March 2015
Victoria Oil & Gas Plc announces that Gaz du Cameroun S.A. ("GDC"), its wholly owned subsidiary, has issued completion certificates to ENEO Cameroon S.A. ("ENEO"), Cameroon's power utility company, for all pipeline construction work and pressure reduction and metering stations ("PRMS") at both the Logbaba and Bassa power stations located in the port-city of Douala, Cameroon.
The work has been completed ahead of the scheduled 15 March 2015 target date and GDC is ready to connect to the gas-fired electricity generations sets ("Gensets") that are being installed by equipment partner, Altaaqa Alternative Solutions Projects DWC-LLC ("Altaaqa").
Approximately 1.4km of 400mm diameter pipeline was connected from the Magzi - Bassa valve station, of which 1.3km was open trenching and 100m horizontal directional drilling. Traffic management was the most challenging aspect of this work as the Logbaba road forms part of the main arterial route from Logbaba into the city of Douala. The two PRMS units, each weighing 5 tonnes, were supplied, assembled and tested by ELSTER UK, while all special components and instrumentation were engineered from ELSTER Germany.
The pipeline pressure tests, consisting of hydrostatic tests (10.5 bar for 2 hours) and pneumatic tests (7 bar for 5 days) were successfully completed and certified by Veritas. The pipeline is now "gassed up" and ready for delivery of gas. The completion of these milestones confirms that GDC has met all of its contractual responsibilities under the Construction Term Sheet signed by GDC and ENEO on 29 December 2014.
Twenty two Gensets with a combined net capacity of 28.6MW for the project have arrived and been cleared through Cameroon Customs by Altaaqa and ENEO at Douala Port. Sixteen of these Gensets (20.8 MW) are now onsite at the Bassa power station and six units (7.8 MW) at the Logbaba power station for installation by Altaaqa. The remaining seventeen Gensets (22.1 MW), are scheduled to arrive in Douala on 15 March 2015 and will be installed at Logbaba station. Target completion date for installation and commissioning of the total 50MW remains the end of March 2015.
Kevin Foo, Executive Chairman, said: "I am very pleased to announce GDC has completed construction of the gas pipelines and metering plant to the Logbaba and Bassa Power Stations, ahead of schedule. This is a significant milestone for us and represents the final step prior to actual delivery of gas to the power stations. I thank every member of our team who contributed to this effort. We look forward to the installation of the Gensets by Altaaqa and being online by the end of the month."
For further information, please visit www.victoriaoilandgas.com or contact:
Victoria Oil & Gas Plc
Kevin Foo / Laurence Read Tel: +44 (0) 20 7921 8820
Numis Securities
John Prior / Ben Stoop Tel: +44 (0) 207 260 1000
Strand Hanson Limited
Angela Hallett / Stuart Faulkner Tel: +44 (0) 20 7409 3494
Tavistock Communications
Jos Simson / Edward Portman/ Nuala Gallagher Tel: +44 (0) 20 7920 3150
Notes to Editors
About Victoria Oil & Gas Plc
Victoria Oil & Gas (VOG.L) is a gas utility company with operations in the industrial port city of Douala in Cameroon, which is the business hub to Central Africa.
The Company's subsidiary, Gaz du Cameroun S.A. ("GDC"), supplies cost effective, clean and reliable gas to industries in the Douala region from its onshore Logbaba Gas Project. Industrial customers are primarily supplied with gas through a 31.3km pipeline network built by GDC in Douala. GDC products currently include thermal gas, gas condensate and gas for electricity generation. GDC gas is attractive to customers due to its reliability, price competitiveness, low hydrocarbon emissions (compared to Heavy Fuel Oil) and adaptability to meet varied power requirement needs.
The Company generates cash flow from the Logbaba Project which is 60% owned and managed by GDC, with RSM Production Corporation, an affiliate of Grynberg Petroleum Company of Denver, Colorado holding a 40% participating interest.
VOG also holds 100% of the West Medvezhye oil and gas exploration project near Nadym, Russia. The field has C1 plus C2 reserves of 14.4mmboe (under the Russian resource classification system, analogous to proven and probable reserves under Western conventions) in addition to best estimate prospective resources of 1.4bboe.
Cameroon Energy Market
Cameroon is a stable African country that is host to a developing economy serving most of Central Africa with goods and services. A power deficit remains a major hindrance to Cameroon's economic expansion. The power grid is reliant on hydroelectric dams to supply 75% of power and the shortfall is made up from heavy fuel oil and gas. Hydroelectric dams are highly seasonal, with stream rates significantly varying from 6,000m3 per second in the wet season to 50m3 per second in the dry season. As with many hydro electrical systems transmission loss is also a constant issue when balancing power loads across distances to different consuming regions. The port-city of Douala is the major industrial zone within Cameroon and it requires high levels of consistently delivered grid power all year round. Currently Cameroon's energy demand is growing at 7% annually and gas is seen as a key element to Cameroons national energy strategy.