Savannah Energy has signed a second gas sales agreement this year via its Accugas subsidiary.
It will supply up to 35 million cubic feet per day to TransAfam Power under an interruptible basis. The contract will run for an initial period of three months, but there is an option for an extension under mutual agreement.
TransAfam owns the Afam Power and Afam Three Fast Power plants, in Okoloma, Rivers State. The company has installed capacity of 966 MW.
Savannah CEO Andrew Knott said he was delighted by the deal. “This represents the second new GSA we have signed this year, bringing our total number of gas customers to seven, as we deliver on our objective to be the gas supplier of choice to the power sector in Nigeria.”
Savannah will deliver gas via the Accugas network and then the Nigerian Gas Co. pipeline. This runs from Ikot Abasi and will not need any more spending to tie in.
Savannah owns an 80% stake in Accugas.
Finding capacity
TransAfam CEO Vincent Ozoude said the deal was in line with the company’s aim of “improving lives and transforming Nigeria. This relationship with Accugas should go a long way in boosting our plant capacity recovery programme and improved power generation to the country.”
Ashley Kelty, of Panmure Gordon, said the deal was a “welcome addition for Accugas, and while contract is short term in nature, we would not be surprised to see it extended”.
Savannah signed a gas sales agreement in February, via Accugas, with Central Horizon Gas Company (CHGC), a subsidiary of Axxela.
This deal covered the supply of 5 mmmcf per day for one year, with an option to extend. Accugas said it would deliver this gas via the Ikot Abasi facility, ultimately reaching CHGC in Port Harcourt.
In April, Savannah also extended a gas sales agreement with Sahara Group’s First Independent Power, first signed in January 2020. This deal covers up to 35 mmcf per day to the Afam power plant, in Rivers State. The new agreement expanded gas supplies to 65 mmcf per day.