Oando Spins Off Power Asset, Constructs LNG Plant In Ajaokuta
Nairametrics| Oando Plc, is concluding arrangements to construct a mini LNG plant in Ajaokuta, Kogi State. The company has also divested its stake in captive plants. A captive power plant is a power generation facility established for a specific area or industry.
Examples of captive power plants in Nigeria are those supplying energy to Covenant University, Ota and the camp grounds of the Redeem Christian Church of God (RCCG) along the Lagos Ibadan Expressway. Poor electricity supply in the country, has meant that individuals and firms have to produce their own power.
The LNG plant will enable it to truck LNG to industries that need it. It also eliminates the need for pipelines which are prone to vandalization. Handing off the responsibility of running power plants, reduces the company’s overhead costs and moves to the area with the most profit margins.
Shareholders however do not have reason to smile anytime soon. Oando has racked up losses, due to its purchase of crude oil assets shortly before oil prices dropped. This has meant that the value of the assets, and revenues from them have also dropped. 9M 2016 results, show it made a loss after tax of N35.9 billion naira. Oando closed at N5 naira yesterday on the NSE, year to date up 6.38%.