NNPC subsidiary N-Gas, reported a 12% dip in profit to $8.476Million in 2021 from $9.532Million in 2020.
This was a large reversal of the leap in profit from $6.217Million in 2019 to $9.532Million in 2020.
Net cash generated from operations fell from $19Million in 2020 to $6.4Million in 2021.
N-Gas is jointly owned with NNPC by Chevron and Shell and its work is to purchase and deliver Nigerian gas to customers in Benin Republic (Communaute Electrique du Benin (CEB) – Cotonou); Togo (Compagnie Energie Electrique du Togo (CEET) Lome) and Ghana (Volta River Authority (VRA) -Takoradi), under their respective gas sales agreements through the West African Gas Pipeline (WAGP).
This means that it pays upstream suppliers like NDWestern and NPDC for taking their gas and pays the pipeline owners for ferrying the gas through the line.
N-Gas reported a 13% drop in revenue on gas delivery charges on sale of gas to VRA, CEB Cotonou and CEET Lome, from $6.5Million in 2020 to $5.6Million in 2021.
Analysis of the revenue from the delivery charges on sale of gas to these entities over the last three years is as follows
2021 2020 2019
US$’000 US$’000 US$’000
VRA 3,742 4,639 4,686
CEB Cotonou 1,179 1,222 492
CEB Lome 644 608 631
5,565 6,469 5,809
N-Gas Limited was incorporated in 2004 as a private limited liability Company. The Company is jointly owned by the Nigerian National Petroleum Corporation (62.35%), Chevron N-Gas Limited (20.00%) and Shell Overseas Holdings Limited (17.65%). The Company’s main activity is to buy and sell natural gas shipped through the Escravos-Lagos Pipeline System (ELPS – NGC) and the West African Gas Pipeline (WAGP) to its customers in the countries of Ghana, Togo and Benin.
N-Gas has executed agreements with upstream producers in Nigeria (Chevron Nigeria Limited Joint Venture (CNL-JV) and Nigerian Petroleum Development Company/ND Western Joint Venture (NPDC/NDW-JV)) and with gas transportation companies (Nigerian Gas Company Limited (NGC) and West African Petroleum Company (WAPCo) ) for the supply and transportation of gas to its customers. The agreement with NPDC/NDW-JV was previously with Shell, ie SPDC-JV but subsequently novated to NPDC/NDW-JV following the divestment of Shell Petroleum Development Company Joint Venture (SPDC-JV) from the asset that is the source of its upstream gas supplies to N-Gas. The Novation agreement which transferred the rights and obligations of the NNPC/SPDC JV parties to NPDC/NDW JV parties in the NNPC/SPDC GPAs, was finally concluded in December 2014 following the execution of the novated Trust Accounts and Security Deeds (TASDs).