Seplat Energy to Expand Gas Production Capacity by 390 MMSCF
Mr Samson Ezugworie, Chief Operating Officer, of Seplat Energy, says the company is set to increase its gas production capacity by an additional 390 million Standard Cubic Feets (MMSCF) of gas by year end.
Ezugworie disclosed this to newsmen shortly after he participated in a panel session at the Africa Energy Forum held on the sidelines of the Oil Technology Conference (OTC) in Houston, Texas on Wednesday.
The theme of the forum is: “The Future of Energy Transformation in Africa: Clean Energy and Business Sustainability”. He said that the 390 MMSCF of gas would be added to the 460MMSCF of gas per day to make 850 MMSCF of gas per day by year end.
According to the COO, currently the company is producing 460MMSCF of gas per day but would ramp up production to 850 mmscf per day by year end when Assa North Ohaji South (ANOH) and Sapele Gas Plants come on stream. He maintained that the entire 850MMSCF of gas would be dedicated to the domestic gas market to support economic growth.
He explained that the injection of the 850MMCF of gas would go a long way in solving problems around gas-to-power because the gas produced from its Oben gas plant goes into the national grid, thereby boosting power generation capacity.
On gas pricing and debt, the Seplat boss said this remained a major issue in the industry, which had discouraged most International Oil Companies (IOCs) from investing in gas. This, he noted, was because the pricing needed to be gotten right while, on the other hand
He said the piling debt for gas produced was a major disincentive, making it a less profitable business.
‘‘But for us at Seplat, what has played out for us is in the areas of strategy and foresight because we clearly know that even if you owe today, there is a chance that you will pay tomorrow because the issue about debt is clearing.
“Now, we are working ourselves into the interruptible gas supply and willing buyer willing seller contracts.
“In addition to that, what we are also doing is that we have a payment structure for those who are off taking our gas that ensures that going forward; we are not going to be having debts piling up. But then, have a structured way of paying outstanding debts.
“Though, it is a delicate balance because this is something we have to do to contribute to the growth of the country. At the end of the day, you will see that the profit margin is not that significant,’’.
To lay credence to the claim of low margins, the COO disclosed that gas was 40 per cent of the company’s production at the end of 2023 and liquids 60 per cent.
However, he said revenue from the 40 per cent gas production was 11 per cent at 123 million dollars. So, what does that tell you? The revenue margin is very little but not a waste. We see that as a good vehicle that we also need to leverage on in running the oil business.
“Why is it so? If you want to run the oil business in a very responsible manner, then it has to go back to the Environment Social Governance (ESG) considerations,” he said. Ezugworie says the company had concluded plans to end gas flaring in 2025.
He said that Seplat is a Nigerian independent oil and a company listed on both the London and Nigerian Stock Exchanges. He said the 2025 target would be reached when the Assa North Ohaji South (ANOH) and Sapele gas plants come on stream, thereby increasing its supply capacity to 850MMSCF of gas daily.
He said: “In the past, gas was perceived to be a bad business because all the oil and gas installations did not have a way of harnessing the associated gas from oil production. The associated gas was flayed, thereby impacting negatively on the environment.
“Now, that has changed in Seplat. We have made conscious efforts to harness the associated gas by putting in place gas solutions. By the second half of 2025, we will bring routine gas flaring to an end.
“With those two projects coming, and 850 million scf of gas per day capacity, the gas will be used by all and 100 per cent within Nigeria for domestic use. Central Bank of Nigeria Suspends Charges on Cash Deposits
