Nigerian oil producer Seplat Petroleum has signed an agreement to supply 16,000 Mcf/d of natural gas to Azura-Edo power plant, the company said, as more oil companies seek to cash in on the nation’s power sector privatisation last year.

Seplat said in a statement recently that the 15-year gas supply to the Azura-Edo power plant, worth $300 million, was also to take advantage of the company’s investment, in partnership with state-owned Nigerian Petroleum Development Company, in the domestic gas business.

“The gas supply contract for power plants will underpin the expansion of Seplat’s domestic gas business,” Seplat CEO Austin Avuru said in the statement.

“The domestic gas space is a huge opportunity for Seplat. The privatisation of the domestic power industry, coupled with a massive government initiative to promote the use of natural gas, has driven investment in gas infrastructure development and power generation,” Avuru said.

Seplat, listed on both the London and Nigerian stock exchanges, operates three onshore Niger Delta oil blocks — OMLs 4, 38 and 41, acquired from Shell in 2011, with average production of 51,300 b/d of oil and 99,000 Mcf/d of gas as at end of 2013.

Seplat explained that the gas would be supplied from its Oben plant to the Azura-Edo power plant, a 450 MW open cycle gas turbine unit. The project, billed to come on stream in 2017, would benefit from the $1 billion power sector funding from local and international financiers sought by the Nigerian government and guaranteed by the World Bank.

Nigeria is home to the world’s ninth biggest gas reserves, with about 187 TCF of proven gas and current production estimated at 8.24 Bcf/day, but the power sector continues to grapple with gas supply shortfalls.

The country’s present electricity generation capacity fluctuates between 4.4 and 4.5 GW as opposed to the 10 GW needed to overcome the country’s crippling power shortages.

Source: Daily Independent