Savannah Energy’s Nigerian subsidiary, Accugas Limited, has signed a gas sales agreement with exploration and production firm Amalgamated Oil Company Nigeria Limited (AMOCON) to supply natural gas to the local market.
AMOCON will supply Accugas Limited with up to 20 million standard cubic feet of natural gas per day (MMscfpd), produced in the OML 156 sole risk petroleum lease area onshore Nigeria, over a period of ten years.
AMOCON will leverage its new 140m pipeline connecting the firm’s Early Production Facility with Accugas’ existing c.260 km/ c.600 MMscfpd transportation network.
“By providing a commercial route to market for otherwise stranded gas resources, the deal with AMOCON represents a new source of growth for Accugas.
This deal has the potential to serve as a template for the commercialization of other stranded gas resources in South East Nigeria, which represents a potentially significant opportunity for Accugas,” stated Andrew Knott, CEO of Savannah Energy.
The deal increases Savannah Energy’s footprint within the Nigerian gas supply market, with the firm now supplying up to 24% of the country’s thermal power generation capacity (up from 10% at the time of acquisition), as well as key petrochemical and cement factories, according to Knott.
While Accugas has traditionally processed, marketed, distributed, and sold gas produced from Savannah Energy’s 80% indirectly owned Uquo gas field, the deal with AMOCON marks the first transaction where the firm will provide consumers with energy sourced from outside of the Uquo field.
