Savannah signs SPA agreement to promote growth

By Favour & Akinola Ajibade

 Savannah Energy Plc, has entered into a Natural Gas Sales and Purchase Agreement (NGSPA)  with Amalgamated Oil Company of Nigeria Limited (AMOCON) in order to improve sales of gas produced in the Oil Mining Lease( OML) 156 to its customers  in the value chain.

This achievement represents the first time Accugas will be supplying gas, that is not produced from its Uquo gas field to customers. 

Of note is that the gas purchased from AMOCON does not require processing by Accugas and as a result of this, the product cannot be utilise available capacity at the Uquo CPF.  

Through the signing, Savannah now has the opportunity to sell gas to customers in thermal and  allied segment of the energy sector and further deepening its operations in Nigeria and beyond, where it has signed numerous Memorandum of Understandings/ Memorandum of Agreements ( MOUs/MOAs) respectively. 

Known as the British Independent Energy Company, which focuses on the delivery of projects that matter, Savannah Energy will leverage on Accugas to achieve its goals.

Accugas, its major gas company, which Savannah Energy owns 80 per cent and as a result, become its largest shareholders.

This firm  focuses on the marketing, processing, distribution and sale of gas to the domestic  market. In 2022,  Accugas processed and transported an average of 145 million standards cubic feet of gas per day (MMscfpd) through its pipeline network, with all gas sourced from the  field owned by its parent company- Savannah Energy.

Of note is the fact that gas is  processed at Accugas’ 200 MMscfpd Uquo central processing facility (“Uquo CPF”) for onward transportation to customers through its c.260km, up to c.600 MMscfpd transportation capacity pipeline network.

Speaking on the issue,  the Chief Executive officer,  Savannah Energy, Andrew Knott said:  

“Since we announced our intention to acquire and own interest in Accugas in 2017, the company has recorded six consecutive years of growth in total revenues at a compound annual growth rate of 21 per cent. We are now contracted to supply gas to up to 24 per cent of Nigeria’s thermal power generation capacity (up from per cent at the time of acquisition) as well as key petrochemical and cement factories. We are clearly performing a critical service to the Nigerian economy.  

Adding that: 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 commercialisation of other stranded gas resources in South East Nigeria which represents a potentially significant opportunity for Accugas.”  he said.