Seven Energy signs $112 million PRG with government
Seven Energy International Limited (Seven Energy) has signed a $112 million Partial Risk Guarantee (PRG) with the Federal Government for the supply of natural gas, delivered by its wholly owned subsidiary Accugas, to the 560 megawatts (MW) Nigerian Integrated Power Project (NIPP), Calabar, and Cross River State.
According to the company, the PRG is a financial instrument that would 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 per cent of current power generation in Nigeria.
The company in a statement said the Federal Government of and the World Bank back the arrangement, which guarantees payments to Accugas for gas supply.
It noted that the deal 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, Prof 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.
He stated that given the current power situation, we expect that this gas that will go into the Calabar plant will provide another 500MW of power, which is very significant given our current situation.
Chief Executive Officer (CEO), Seven Energy, Phillip Ihenacho, noted that the signing of the agreement is very significant because it is the first gas to power guarantee that the World Bank has provided for encouraging investment in the gas sector in the country.
“It assists in securing and leveraging the $700 million investment already committed into the gas infrastructure in Nigeria.”