Seven Energy says it has satisfactory met all the conditions precedent to the long term Gas Sales Agreement, GSA, for the supply of gas by Accugas Limited to the Calabar Integrated Power Project, IPP.
The Calabar GSA which ticked off on September 22, 2017 is supported by a World Bank Partial Risk Guarantee, PRG.
The PRG, which has the backing of the Federal Government of Nigeria, is a financial instrument that will secure the supply of up to 131 million cubic feet per day, MMcfpd, of natural gas under the Calabar GSA.
It will enable the consistent generation of up to 561 MW of electricity to the national grid, representing around 15 percent of current power generation in Nigeria, the company said.
This arrangement, which guarantees payments to Accugas for gas supply, is backed by the Federal Government of Nigeria and the International Development Agency of the World Bank.
It described this as the first of its kind for gas supply in Nigeria, adding that it is a demonstration of the Federal Government’s commitment to increasing power supply in the country and stabilising the ‘gas to power’ value chain.
To date, Accugas has been supplying gas to Calabar NIPP under an interim gas sales agreement, with average deliveries in 2017 to date of 45 MMcfpd. The Calabar GSA includes a 90 business day grace period during which the PRG cannot be called upon.