Seplat Petroleum Development Company Plc Wednesday said it had taken a final investment decision to develop gas fields in the country’s Imo state and would raise $700 million for the venture in partnership with the Nigeria National Petroleum Corporation (NNPC).
Seplat Chairman and co-founder A.B.C Orjiako, told Reuters during a visit to London that a decision had been taken to develop the Assa North and Ohaji South gas fields. He said the company was deepening its operations in the sector.
The company, which has dual listings in Lagos and London , is focusing heavily on gas investments, drilling and acquisitions to boost its gross output with the aim of tapping into demand for electricity. It now supplies around 30 percent of the gas required for power generation in Nigeria.
Orjiako said Seplat’s gas production stood at 525 million standard cubic feet (scuf) per day from 90 million scuf nine years ago.
In 2013, Nigeria, which is plagued by blackouts, started selling parts of its moribund state electricity firm in a privatisation aimed at improving power supplies and attracting billions of dollars in investments, neither of which happened.
Most of the plants sold in that privatisation were gas-fired, operating below capacity due to inadequate gas supply.
Orjiaku said Nigeria had one of the highest cost per kilowatt of power, but it produces less than 10 percent of its requirement. The bulk of electricity produced comes from diesel generators which is expensive and unreliable.
Despite holding the top spot among Africa’s oil producers, Nigeria’s power generation and electricity grid are plagued by a lack of investment and poor infrastructure which leaves many people dependent on diesel generators.
Orjiaku said the sector could thrive once government relinquished its tight control on power generation.