Chief Executive Officer of Seven Energy International Limited, Phillip Ihenacho, has disclosed that the company was targeting the development of the Anambra Basin for the supply of gas to industries in the eastern and parts of northern Nigeria. Ihenacho said in an interview in Abuja, Nigeria’s capital city, that Seven Energy was investing substantially on three blocks in the Basin with hope of supplying gas to power plants and local industries.
“In the 70’s a few wells were drilled in the Anambra basin and were subsequently abandoned. Then, the last thing you wanted to find was gas, so the wells were sealed and left. The Basin sits effectively underneath Onitsha, Nnewi, Aba and Owerri all the way up to Enugu which are all areas with substantial light industry, using diesel fuel.
“We have recently farmed into three blocks in the Basin and our plan is to invest in developing gas in that area in order to supply gas to these locations. This will take time, as there has not been that much sub-surface work done in the area to date.
“This is a long-term plan and we hope to use a combination of pipelines and compressed natural gas that can be delivered by road in the interim. We are exploring near-term ways of monetizing gas such as compressed natural gas and liquefied natural gas.
“There are CNG players in the market today. Lagos and Port Harcourt are being supplied already. This presents a big opportunity for Seven Energy to assist with the industrialization in these areas, but also to support power and industry further afield in large cities in the North such as Kaduna and Kano, which can be reached by road deliveries of CNG or LNG”.
Ihenacho explained that so far the company has invested over $800million in developing gas infrastructure in its area of operation between Port-Harcourt and Calabar and up to Aba.
“We have invested in pipeline infrastructure which, once we have completed the next phase, will mean we have a pipeline network of over 250 km and a processing plant that can process in excess of 200million standard cubic feet a day of gas. This is a substantial investment and by next year, we will have invested over 1 billion dollars.
“It is not easy to raise capital for infrastructure and the success of our business is essential for Nigeria to continue to attract further investment in the sector. Success will bring further capital.
“We have invested on the basis of long-term off-take agreements with Ibom Power, UNICEM – the Lafarge cement factory and Calabar NIPP and these agreements are 10-20 years in duration. Ideally these contracts are backed up by credit enhancement or guarantee, for example the World Bank is working with us on Calabar NIPP.
“These contracts give us a few anchor customers with which we have long-term off-take contracts. It is very similar to constructing a new building where you look for a few tenants who can take a few floors for a 10-year lease, and once these are in place, you have the confidence to build. Once the building is ready, you can then look for additional tenants.”
He said the country needs to “unlock money for the private sector and this can be facilitated by working with organizations like the World Bank and African Development Bank to enhance credit and provide some sort of guarantee to create credit worthy long-term contracts.”
Seven Energy International Limited is an independent Nigerian integrated oil and gas development, production and gas distribution company founded in 2004. With the backing of strategic long-term investors and main offices in Lagos and London, the Group has a unique focus on the emerging Nigerian domestic gas market. The Group’s upstream assets include license interests in the Uquo Field and the Stubb Creek Field (south east Niger Delta), an indirect interest in OMLs 4, 38 & 41 through a Strategic Alliance Agreement with Nigerian Petroleum Development Company (north west Niger Delta) and a license interest in OPL 905 (Anambra Basin). Its midstream infrastructure assets, focused on south east Niger Delta, include the 200 MMcfpd Uquo Gas Processing Facility and a gas pipeline network of 260 km with distribution capacity of 600 MMcfpd.