Nigeria to raise US $700m for Assa North-Ohaji South joint gas project
The government of Nigeria has announced plans to raise US $700m for a joint gas project between Seplat Petroleum Development and Nigeria’s State oil company in bid to reduce the reliance on oil in the country.
Assa North-Ohaji South project is one of the seven gas production infrastructures in the West African Nation which is the continent’s largest crude producer. ANOH Gas Processing which is owned and managed by Seplat and the Nigerian Gas Co, a unit of the Nigerian National Petroleum Corp will develop, build, operate and maintain the gas plant in Southeastern Imo State.
According to Seplat CEO Austin Avuru, Seplat and Nigerian Gas will provide 60% of the funds as equity while on the other side ANOH will source the remaining balance as debt.
“As at now both parties have contributed US $100m in equity and there will also be another equity injection coming and the back end of it will be debt,” said Avuru.
The plant will process wet gas which has a capacity of US $300 standard cubic feet per day and will begin production works at the last quarter of 2020 with its major supply targeted to begin in 2021.
The government of Nigeria is also encouraging investments in gas in order to increase supply to power companies and move the economy from over dependence in oil which currently accounts for the bulk revenue in the country.
ANOH has the capacity to double production depending on the domestic demand available in the country, for this reason ANOH will target local customers. On the other side Seplat will double its capital spending to US $200m as it seeks to take advantage on relative stability in the Niger Delta region. The firm says it will spend 70% of its capital budget on drilling while the rest for facilities and gas development.
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