Accugas Announces Revised Gas Sales Agreement with Lafarge Africa
Published: Thursday December 31, 2020
By: Oilfield Africa Review
Savannah Energy the
African-focused British independent energy company sustainably developing high
quality, high potential energy projects in Nigeria and Niger, has announced
that its Accugas subsidiary has entered into a revised gas sales agreement
(“GSA”) on favourable terms with Lafarge Africa PLC, part of the LafargeHolcim
Group, for the supply of gas to its Mfamosing cement plant in Cross River
State, Nigeria.
“Taking into account the challenging market
conditions in 2020, I am pleased with the way the Savannah team and the wider
Group have performed. Today, we are reiterating our Total Revenues guidance,
reducing our cost guidance by US$25m and are set to deliver record Nigerian
cash collections and production volumes in 2020. The deal with Lafarge Africa
is also a significant “win-win” for both parties; Accugas is receiving a higher
effective gas price in the near-term years, accelerating near and medium term cash
flows, our contract with a key customer is being extended for an additional
five years and significant spare capacity is being freed up, which we can sell
gas to other customers.
“All while
Lafarge Africa is able to utilise its existing make-up gas balance. We are looking
forward to 2021 with excitement as we continue to work with our stakeholders to
develop and grow our business for the benefit of all,” Andrew Knott, CEO of
Savannah Energy, said.
Further stated
in the press released, the company said that it has Revised Capital Expenditure guidance of
approximately US$8.0m – US$10.0m (from up to US$45.0m) primarily due to
rescheduling of the capital expenditure programme and the deferral of drilling
a new gas production well on the Uquo field, with the Accugas compression
project now accelerated and expected to commence in early 2021.
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