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    Savannah Strikes Nigerian Gas Sales Deal


The gas will be compressed and used to replace 400 MW of diesel-fired power generation.

by: Joe Murphy

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Savannah Strikes Nigerian Gas Sales Deal

West Africa-focused Savannah Energy has signed an agreement to sell gas from its majority-owned Uquo field in Nigeria to Egypt's Mulak Energy, for compression and subsequent use in power generation, it said on February 5.

Savannah said its Accugas subsidiary would supply the gas over seven years, providing up to 2.5mn ft3/day in the first two. The companies are yet to decide on volumes in the second, five-year phase. Mulak, part of Egyptian conglomerate Mansour Group, will compress the gas and distribute it to industrial customers in Nigeria's Rivers State, substituting diesel in generators.

These generators are supplied by Mantrac Group, another Mansour unit and one of the largest dealers in Caterpillar machinery, power systems and equipment. Mulak is "in a unique position to exploit the synergies with Mantrac's business in Nigeria," by converting around 400 MW of diesel-fired generators to compressed natural gas (CNG). Doing so will lower energy costs to Mantrac's customers by 40% and reduce carbon emissions by 30%.

By moving into CNG, Savannah "significantly extends the reach of [its] existing 260-km pipeline network into light industrial and even domestic power generation without the need for further investment in pipelines," CEO Andrew Knott said. 

His counterpart at Mulak, Omar Hassan, said the company was "certain that gas will play a central role in fuelling Nigeria's growth."

"We foresee potential that this agreement with Accugas-Savannah will serve as a platform for increased cooperation between our two companies as we work to achieve our shared vision of bringing ever larger volumes of gas to the Nigerian market creating value for our shareholders and ultimately the industries and people of Nigeria," he said.