Seplat raises $260m debt to complete major Nigerian gas project

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Nigeria leading Oil and gas producer, Seplat Petroleum Development Company Plc, is on course to complete its ANOH Gas Processing Plant, jointly owned with the Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC), after raising $260 million debt from a syndicate of seven banks.

Seplat and the Nigerian Gas Company had prior to obtaining the $260 million, provided $420 million between them as equity contribution to fund the 300 million standard cubic feet per day capacity plant, Seplat said in a note sent to Naija247news

Zenith Bank Plc, Stanbic IBTC Bank Plc, Union Bank of Nigeria Plc, United Bank for Africa Plc, FirstRand Bank Limited (London Branch)/RMB Nigeria Limited, FCMB Capital Markets Limited and The Mauritius Commercial Bank Limited mobilised the $260 million funding.

“Funding commitments of more than US$450 million were received by the company, which is a significant oversubscription and a strong sign of confidence in the project,” said Seplat, which is dual-listed on the Nigerian Stock Exchange and the London Stock Exchange.

The development of the facility is now envisaged to cost no more than $650 million, which is 7.1 per cent shy of the initial estimation of $700 million.

Seplat, Nigeria’s most capitalised energy firm, and NNPC launched the ANOH project in 2017 and look to deliver its first supply in 2022.

Seplat is ramping up investments in gas to rebalance revenue following a steep fall in oil demand triggered by the double whammy of an oil price crash in April and the pandemic outbreak.

Nigeria intends to reduce its dependence on crude by attracting investors to its over 200 trillion cubic feet of proven gas reserves, an aspiration Seplat believes the ANOH plant can help achieve by speeding up the transition “from small-scale diesel generators to cleaner, less expensive fuels such as natural gas for power generation.”

“Once operational, AGPC will be a significant supplier of gas to Nigeria’s power sector, supporting local employment and the cleaner generation of power for Nigerian homes and businesses,” said Okechukwu Mba, managing director of ANOH Gas Processing Company.

“We conservatively estimate that the gas from AGPC will be enough to generate electricity for more than 5 million people.”

Shares in Seplat closed trade in Lagos on Monday at N495 per unit, up by 1.02 per cent and in London at 75.20 GBX, up by 2.45 per cent.

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