By Modupe Gbadeyanka
Gas supply agreements that would up to last 20 years have been signed between Oando Plc and Nigeria Liquefied Natural Gas Ltd (NLNG).
A statement issued by the indigenous energy group listed on both the Nigerian and Johannesburg stock exchanges disclosed that it sealed a renewal of gas supply deal for the existing Trains 1-3 for a term of 10 years and a gas supply for the impending Train 7 for a term of 20 years.
It was stated that the contracts were signed by the upstream subsidiary of the company, Oando Energy Resources, with the Group CEO of Oando, Mr Wale Tinubu, representing the firm and Managing Director of NLNG, Mr Tony Attah, standing in for his organisation.
In addition, present at the signing ceremony were the Group Managing Director of NNPC, Mr Mele Kolo Kyari; Managing Director of NPDC, Mansur Sambo; and representative of Managing Director of NAOC, Mr Massimiliano Bertona, who is the General Manager Commercial & Negotiations at NAOC.
Under the terms of the current agreement, the NAOC Joint Venture (JV) made up of NNPC/NAOC/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, stating that the first GSA is a renewal of the gas supply terms for Trains 1-3.
Oando noted that 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, adding that this is expected to come on stream in 2024, and will bring the JV’s total supply obligation to 1.1Bcf.
“The execution of these agreements also effectively monetizes ca. 3.3Tcf of gas for the NAOC JV of which 666Bcf will be net to Oando,” it stated.
“We are particularly pleased to be the only indigenous company party to the NLNG supply agreement, testament to the potential of local players.
“The NLNG vehicle 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,” Mr Tinubu was quoted as saying in the statement.
