Savannah Energy PLC has announced that its Accugas subsidiary has entered into a new gas sales agreement (GSA) with Mulak Energy Limited
The GSA is initially for a seven-year term. It envisages the supply of gas produced by Savannah’s majorityowned Uquo field for an initial two-year period on an interruptible basis and the subsequent five years on a firm contract basis. During the Interruptible Gas Delivery Period, Mulak is able to nominate a maximum daily quantity of up to 2.5 mmscfpd.
Volumes in the Firm Delivery Period will be agreed by the parties before the end of the Interruptible Gas Delivery Period. The GSA is priced to reflect Mulak’s status as an industrial customer; Accugas, therefore, expects to see its weighted average gas sales price realisation increase as a result of this contract, without the need for any incremental capital expenditure beyond our previously announced plans.
Mulak is a member of the Mansour Group, the leading Egyptian multinational conglomerate with operations in more than 100 countries and annual revenues exceeding US$7.5bn. The agreement for the supply of gas to Mulak’s Compressed Natural Gas (CNG) Nigerian project represents Savannah’s first gas-to-CNG sales agreement. Mulak initially plans to distribute CNG to its industrial customers in Rivers State with the CNG to be substituted for diesel in generators supplied by the Mantrac Group, also a member of the Mansour Group and one of the world’s largest dealers in Caterpillar machinery, power systems and equipment.
Andrew Knott, CEO of Savannah Energy, said, “Our first Gas-toCNG agreement is hugely exciting as it represents Savannah’s entry into the compressed natural gas market, which we see as offering strong growth potential for our business over the course of the next decade. The CNG market significantly extends the reach of our existing 260km pipeline network into light industrial and even domestic power generation without the need for further investment in pipelines. For example, the Mansour Group subsidiary, Mantrac, currently has an installed customer base of approximately 400MW of diesel-fuelled power generation, which has grown every year for the last decade. I would like to thank the Mansour Group for choosing to partner with Accugas and we look forward to providing them, and their customers, with a reliable, lower cost source of energy for power generation with an estimated 30% reduction in the carbon footprint of their existing diesel generators.”
Omar Hassan, CEO of Mulak Energy, added, “Mulak Energy is extremely pleased to have entered into this gas sales agreement with Accugas– Savannah Energy. As part of the Mansour Group, Mulak Energy strongly believes in Nigeria’s potential and future. Moreover, we are certain that gas will play a central role in fuelling Nigeria’s growth and prosperity for the foreseeable future and are proud to be participants in this important development.”
