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Accugas Announces Revised Gas Sales Agreement with Lafarge Africa

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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