Seven Energy International Limited, the indigenous integrated oil and gas development,production and gas distribution company with interests in Nigeria, has announced that it has secured US$255 million of new equity capital, enabling the Group to further develop gas supply opportunities in Nigeria’s domestic energy market.
Temasek, the Singapore investment company, has committed US$150 million, the International Finance Corporation (IFC), a member of the World Bank Group,has committed US$75 million, and the IFC African, Latin American and Caribbean Fund (IFC ALAC Fund) has committed US$30 million. The investments will be in two tranches, the timing of which is subject to the satisfaction of certain conditions in the investment agreements.
The institutions are investing in Seven Energy’s irredeemable convertible loan notes which bear no coupon and are akin to equity capital. On a converted and fully diluted basis, on full satisfaction of the investment agreements, the new investors would account for approximately 26% of the equity capital of the Group.
This new equity capital will assist Seven Energy in the development of its growing portfolio of assets in Nigeria, where the Group is focusing on the development of upstream reserves and resources and gas infrastructure to provide gas to the domestic market for power generation and industrial consumption.
Through its gas processing, distribution and marketing subsidiary, Accugas Limited (Accugas), and its recent acquisition of the East Horizon pipeline, the Group has to date invested approximately US$1 billion in Nigeria. This reinforces the Group’s position as a leading integrated gas company in Nigeria. The Group aims to capture the growing demand for gas and power as Nigeria’s industrial base grows and the liberalisation of the power sector spurs further investment in generating capacity.
The Group has long-term take-or-pay gas sales agreements in place to sell over 1.4 trillion cubic feet of gas.
A 10-year contract to supply 43.5 million cubic feet of gas per day (mmcfpd) to Ibom Power; a 20-year contract to supply 131mmcfpd to the federally-owned power plant at Calabar; and a 20-year contract to supply 25mmcfpd to a cement plant in the Calabar area, increasing to 50mmcfpd upon the anticipated expansion of the plant. The two power stations, which will have a combined installed capacity of approximately 750MW when fully commissioned, will add an additional 20% of capacity to Nigeria’s current operating electricity generation capacity.
In collaboration with its customers and other stakeholders, Seven Energy is working to link its infrastructure together to establish a 300km gas ring of 24-inch and 18-inch high pressure pipelines in Akwa Ibom and Cross Rivers states with total distribution capacity of 600mmcfpd, capable of supplying the demand centres of Calabar, Uyo and Ikot Abasi, and giving access to Port Harcourt to the west.
– Olusola Bello
