By Foluso Ogunsan
Nigerian natural gas supplier Accugas has entered into a new gas sales agreement (GSA) with Mulak Energy Limited.
Accugas is a subsidiary of Savannah Energy PLC, the British independent.
The GSA is initially for a seven-year term. It envisages the supply of gas produced by Savannah’s majority-owned Uquo field for an initial two-year period on an interruptible basis (the “Interruptible Gas Delivery Period”) and the subsequent five years on a firm contract basis (the “Firm Delivery Period”). During the Interruptible Gas Delivery Period, Mulak is able to nominate a maximum daily quantity of up to 2.5 MMscf/d (MMscf/d means Million standard cubic feet of gas per day).
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.
Sales under the GSA benefit from a bank guarantee arrangement from an investment grade credit rated international bank.
Mulak is a member of the Mansour Group, an Egyptian multinational conglomerate which claims operations in more than 100 countries and annual revenues exceeding $7.5Billion.
Mulak says it 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.
“Mulak is in a unique position to exploit the synergies with Mantrac’s business in Nigeria through the conversion of Mantrac’s existing customer base of approximately 400MW of diesel-fuelled generators to CNG-fuelled generators”, Accugas says in a release. “Sales under the GSA are expected to commence in 2022 and, following the initial two-year period, Mulak has indicated that it is seeking to expand its CNG sales on a pan-Nigeria basis to Mantrac customers”.
