Seplat Petroleum has raised cash for its ANOH gas plan from a group of primarily Nigerian banks.
The seven banks agreed to provide $260 million of debt for the ANOH gas processing plant. The cash was raised via an incorporated joint venture, ANOH Gas Processing Co. (AGPC).
The total construction cost for the project is $650mn, down from the originally projected cost of $700mn. The rest of the cash will come from the AGPC venture and the project is now fully funded.
“Completing the funding of ANOH is an important milestone for AGPC. The ANOH development is one of the government’s Seven Critical Gas Development Projects [7CGDP] and our involvement provides a clear path towards strengthening Seplat’s position as Nigeria’s leading indigenous diversified energy producer,” said Seplat’s CEO Roger Brown.
“It will help us drive, alongside our government partners, Nigeria’s transition to cleaner, less expensive power generation. We are extremely proud to partner with the Nigerian Gas Co. [NGC] in this strategically important project, which will create jobs and prosperity in the Nigerian economy.”
The CEO said Seplat would continue to diversify its business, and invest in gas, as part of a drive to create more sustainable growth in Nigeria.
Stanbic IBTC Bank, United Bank for Africa, Zenith Bank, FirstRand Bank (London Branch) / RMB Nigeria, The Mauritius Commercial Bank, Union Bank of Nigeria and FCMB Capital Markets made up the banking consortium. Stanbic also served as advisor.
The debt financing also provides for another $60mn accordion at the time of completion. This would be available to fund an equity balancing payment – if the company decides to take this route. Seplat had hoped to complete the funding process in 2020.
Seplat received total commitments of more than $450mn. The company said this was a strong sign of confidence in the project.
First gas plans
The ANOH plant will have 300 million cubic feet (8.5 million cubic metres) per day of capacity. It will be in OML 53, in Imo State.
In October, Seplat said it expected ANOH to reach first gas in the fourth quarter of 2021. Shell Petroleum Development Co. (SPDC) is handling the upstream side of things. SPDC agreed to push back drilling of wells from November 2020 to the first quarter of 2021, to ensure upstream gas is available when the midstream facility is ready.
While the financing has been slightly delayed, Seplat still aims to achieve first gas as scheduled.
AGPC is a joint venture involving Seplat and the Nigerian Gas Co. (NGC), which is a subsidiary of Nigerian National Petroleum Corp. (NNPC).
The venture’s managing director Okechukwu Mba said that once AGPC was operational it would be “a significant supplier of gas to Nigeria’s power sector, supporting local employment and the cleaner generation of power for Nigerian homes and businesses. We conservatively estimate that the gas from AGPC will be enough to generate electricity for more than 5 million people.”