Key highlights
- The highly anticipated Assa North Ohaji South (ANOH) gas project will produce the first gas by Q4/2023, according to Seplat
- The ANOH project has already achieved 95% mechanical completion.
- Despite recording lower gas revenues in 2022, Seplat will focus on increasing its gas revenues through more utilization of its natural gas plants.
The Assa North Ohaji South (ANOH) natural gas project expects to produce its first gas by the fourth quarter of 2023.
This is according to findings made by Nairametrics after studying Seplat Energy’s 2022 full-year financial report.
The ANOH gas project, which has been referred to as a game changer, was earlier planned to begin operations in mid-2022. However, as cited in the company’s 2022 report, the project was pushed back due to delays in third-party infrastructure. The first gas is now expected by the final quarter of 2023.
More insights on the ongoing project:Â According to the Seplat report, the ANOH gas project has achieved 95% mechanical completion. The company said it has partnered with the NNPC Gas Infrastructure Company(NGIC), which is delivering the Obiafu-Obrikom-Oben (OB3) project, to spur pipelines to connect ANOH to customers. But there are delays owing to river tunnelling issues.
The company noted that two upstream wells have been completed by Shell Petroleum Development Company (SPDC), and two more will be completed in 2023.
Sapele gas processing plant:Â According to the Seplat, the Sapele gas processing plant is at 60% completion and the first gas is expected in 2024. It stated that an upgrade at the plant has increased capacity to 85 million standard cubic feet per day(MMscfd)to deliver export-standard gas. The company highlights the fact that the plant will have liquefied Petroleum Gas (LPG) processing module, which will open new markets for LPG products. Also, associated gas compressors have been installed and will capture otherwise flared gas for processing and sale.
Oben gas processing plant:Â The Seplat report highlights the fact that the Oben gas processing plant maintained a 112.3 MMscfd average for 2022 at an average gas price of $2.82/million standard cubic feet (Mscf). The company signed short-term gas sales agreements (GSAs) with three new customers for a combined 86 MMscfd offtake, amounting to eight GSAs totalling 396 MMscfd.
Slight decrease in gas production revenues in 2022:Â According to the report, Seplat showed a 2.6% decrease in gas production revenues in 2022, due to slightly lower average gas pricing ($2.82/Mscf) following the domestic gas delivery obligation (DGDO) pricing revision. The company made $112.5 million in 2022, as opposed to $114.8 million made in 2021. However, in 2023, the company intends to generate long-term, highly visible revenue streams by expanding the gas business as well as maximizing revenue potential through higher utilization of existing gas plants.
The backstory: The Buhari administration has attached a lot of importance to the ANOH project as a critical gas project and an important part of Nigeria’s gas revolution because it will feed the Ajaokuta-Kaduna-Kano project. The Escravos-Lagos Pipeline, and the Obiafu-Obrikom-Oben project.
What you should know: In its report, Seplat notes that gas was 44% of production, providing a Naira-based hedge against oil price volatility. It also notes that in 2023, some of its priorities will include completing the Sapele integrated gas processing plant as well as ‘flares out’ projects at Oben, Amukpe, Sapele and Jisike.
