Efforts to bridge gas supply gap to power generation companies has led to the inking of gas supply agreement between the federal government and Seven Energy International Ltd.
The $112 million Partial Risk Guarantee (PRG) agreement is expected to enhance supply of natural gas to the Calabar NIPP.
The gas, under the agreement, would be delivered by Seven Energy’s subsidiary Accugas, to the 560 MW Nigerian Integrated Power Project (NIPP), Calabar, Cross River State.
The Partial Risk Guarantee is a financial instrument that will secure the supply of up to 130 million cubic feet per day (“MMcfpd”) of natural gas to NIPP Calabar, thereby enabling the consistent generation of an additional 560 MW of electricity to the national grid, approximately 20 percent of current power generation in Nigeria.
This arrangement, which guarantees payments to Accugas for gas supply, is backed by the Federal Government of Nigeria and the World Bank.
It will be the first of its kind for gas supply in Nigeria and is a demonstration of the Federal Government’s commitment to increasing power supply in the country and stabilising the ‘gas to power’ value chain.
Commenting on the agreement, Vice President, Professor Yemi Osinbajo said “I must say that this is a very significant event for us and as we all know this is the first PRG for gas that we are signing. We know that it will encourage investment in gas infrastructure and we are certainly looking forward to the multipliers that will come from it”.
The Vice President commended Seven Energy for completing the 69 km, Uquo to Creek Town pipeline which will provide a continuous flow of natural gas from the Uquo Field in Akwa Ibom state to NIPP Calabar in Cross River state and add up to 560 MW to the national grid.