Cameroon Producer Sees Demand Up
Cameroon producer Victoria Oil & Gas has boosted output at Logbaba to meet growing demand for its gas, it said January 21, almost doubling its sales thanks to the return of its biggest customer, Eneo.
January production averaged 8.5mn ft³/d as of January 19 and 9.9,m ft³/d in the week ending January 19, it said. It reached a peak of 12.96mn ft³/day January 18.
Eneo's demand for gas for the 30-MW Logbaba power station has doubled since the resumption of the contract in late December, VOG said. Its wholly-owned subsidiary Gaz du Cameroun (GDC) had entered into a binding term sheet with Eneo December 21, allowing gas supplies to the plant to resume the next day. Eneo's gas demand is now above the take or pay levels of 4.88mn ft³/d.
The term sheet with Eneo sets out three-year contract with peak delivery of 6.1mn ft³/d and 80% minimum offtake over the year, meaning a minimum average additional gas supply of 4.88mn ft³/day. This differs from the previous contract, which contained a seasonal minimum take or pay element of 90% during the January to June dry season and 30% during the wet season July to December.
The initial gas sale price of $6.75 /mn Btu will rise over the three-year term of the agreement by $0.10/mn Btu on each anniversary of the effective date of the agreement.
Although the contract represents a major step forward, VOG remains focussed on a broad customer base. It said: "Our industrial customers are consuming at record levels as reported in our Q4 18 operations update and the business development of these and other routes to market continue to be developed."
The signs are good: it said its industrial customers "are consuming at record levels as reported in our Q4 18 operations update and the business development of these and other routes to market continue to be developed."