Cameroon Utility Halts Offtake
Cameroon’s power utility Eneo suspended natural gas supply January 9 to its 50MW Logbada thermal power plant, near the port city of Douala.
The news was disclosed in a statement by Gaz du Cameroun (GDC), subsidiary of UK firm Victoria Oil and Gas (VOG) which operates the nearby Logbada field that supplies Eneo with gas. GDC said it was notified January 5 of Eneo’s decision to suspend within days its offtake as a result of non-payment of a $182.18mn debt by the state, indicating that the debt impairs Eneo's cash-starved ability to operate.
In response to multiple demands by Eneo, Cameroon's finance ministry in mid-December 2017 settled part of the debt, $27.32mn to be exact. At the time Eneo qualified the payment as a “true breath of air for the power production and distribution company on the verge of financial asphyxia.”
According to online newspaper Business in Cameroon, Eneo used the monies from the finance ministry to pay what it owed suppliers, including Cameroon's oil refiner Sonara, and the Kribi Development Corporation (KPDC) which owns the Kribi gas-fired plant. The latter's operating capacity was reduced by 100MW (from 216MW) since November 2017, due to the heavy debt of its main client, Eneo.
GDC had been supplied Eneo at an interim gas price of $7.50/mn Btu until end-2017 under an arrangement reached June 2017, after its original contract with Eneo (at $9/mnBtu) expired April 22. Sources indicated the 50 MW Logbada unit was procuring alternative fuel but it was unclear if the unit was fully operational.
Since 2014 Eneo has been 56%-owned by UK-based fund Actis, which invests in developing markets infrastructure, with the other 44% held by the state of Cameroon. Actis acquired its stake from US firm AES.