Post Views: 164 Oando Energy Resources, the upstream subsidiary of Oando Plc, Nigeria’s indigenous energy group, on Friday, said it has successfully s...
Oando Energy Resources, the upstream subsidiary of Oando Plc, Nigeria’s indigenous energy group, on Friday, said it has successfully signed two Gas Supply Agreements (GSA) with the Nigeria Liquefied Natural Gas Limited (NLNG) to renew gas supply for the existing Trains 1-3 for a term of 10 years and for gas supply for the impending Train 7 for a term of 20 years.
Under the terms of the current agreement, the NAOC Joint Venture (JV), comprising the Nigerian National Petroleum Corporation, Nigeria Agip Oil Company, and Oando, has a total supply obligation of 850MMScf for Trains 1–6.
The JV is specifically responsible for supplying a Daily Contract Quantity (DCQ) of 344.6MMscf/d for Trains 1-3 and 505MMscf/d for Trains 4-6, making the NAOC JV the second-largest gas supplier to NLNG. The first GSA is a renewal of the gas supply terms for Trains 1-3.
In addition to the JVs current supply to trains 1-6 and under the terms of the second agreement the JV will be responsible for supplying a DCQ of 294.7MMScf/d for Train 7, which is expected to come on stream in 2024, and will bring the JV’s total supply obligation to 1.1Bcf.
According to a statement by Ayotola Jagun, Oando’s Company Secretary, the execution of both agreements also effectively monetizes ca. 3.3Tcf of gas for the NAOC JV, of which 666Bcf will be net to Oando.
The NLNG GSAs were signed by Tony Attah, Managing Director, NLNG; Massimiliano Bertona, General Manager Commercial & Negotiations, NAOC, who represented the Managing Director of NAOC; Alhaji Mansur Sambo, Managing Director, NPDC and Wale Tinubu, Group Chief Executive, Oando Plc, at an event chaired by Mallam Mele Kolo Kyari, Group Managing Director, NNPC.
Commenting on the agreement, Tinubu expressed particular pleasure at being “the only indigenous company party to the NLNG supply agreement, (which is) testament to the potential of local players.”
The NLNG vehicle, he explained, “will support the Federal Government’s efforts to grow reserves, boost the country’s gas footprint and market share in the global LNG market and, in turn, positively develop the Nigerian economy – a goal that we are aligned with and have always wholly endorsed.
“The signing of these two agreements confirms and consolidates our long-term partnership with NLNG. Furthermore, it is a validation of NLNG’s confidence in our operational track record. The execution of the GSA is another positive stride in our journey to becoming the leading independent exploration and production company; being a 20-year guaranteed income stream, it will strengthen our financial position, as well as, demonstrate to our key stakeholders the company’s growth potential.
“Finally by way of this agreement, and in line with our increased focus on sustainability and social impact, the JV is closer to its objective of achieving zero gas flare in the immediate future. We will continue to collaborate with our partners and other stakeholders in finding creative solutions to move both the industry and economy forward,” Tinubu stressed.
The execution of both GSAs is a significant milestone for the company, its JV partners, and NLNG. It satisfies a condition precedent for NLNG to take its Final Investment Decision (FID) on Train 7 and also guarantees continuous gas supply for its existing trains after the expiration of the current agreements.
Photo caption: From left, Tinubu and representatives of the other partners displaying the agreements.