Axxela’s new gas plant to expand Nigeria’s gas infrastructure following bond success


Axxela Limited, a leading African gas and power company owned by Helios Investment Partners and Sojitz of Japan, has announced a Final Investment Decision to develop a 50 million standard cubic feet per day (MMscf/d) gas processing plant in Delta State, as it pushes towards sustainable energy solutions in Nigeria. This decision is bolstered by Axxela’s successful ₦16.4 billion bond issuance earlier this month, which was oversubscribed by 109 percent. The announcement comes as Axxela continues to expand its footprint in the energy sector, following last year’s agreement with BUA Group, one of Africa’s largest conglomerates, and CIMC ENRIC, a global leader in the energy equipment industry, to build a 700-ton-per-day mini liquefied natural gas (LNG) project. The new gas processing plant, expected to begin operations by the end of 2024, will start with a 12 MMscf/d modular unit and is designed for rapid expansion, with the potential to increase the plant’s output to 50 MMscf/d within 18 months. It is a key part of Axxela’s strategy to support the Nigerian government’s Decade of Gas initiative and to enhance domestic gas utilization. Strategically located in OML 152, the gas processing plant is expected to serve as a central processing hub for surrounding oil & gas operators, with the potential to transform gas flaring into a valuable economic resource, and significantly reduce CO2 emissions. “We are positioning to develop requisite infrastructure for natural gas processing and last mile distribution that creates market access for at least 20% of Nigeria’s gas demand,” Axxela’s Director of Business Development, Franklin Umole, said in a company statement. “Over the past two decades, we have been at the forefront of natural gas advocacy, and this project is a further reaffirmation of our dedication to gas infrastructure development and our vision to deliver innovative energy solutions across Nigeria and Africa.’’ In preparation for the project, Axxela has secured a long-term feedstock supply agreement with a leading local upstream company and established equipment supply arrangements with top-tier Original Equipment Manufacturers (OEMs). Upon completion, the processed gas will support various market segments, including Compressed Natural Gas (CNG) for vehicles, industrial feedstock, and decentralized power solutions, marking a significant step towards energy security and economic growth in Nigeria. Boost from successful bond issuance In a related financial achievement, Axxela recently raised ₦16.4 billion in an oversubscribed bond issuance, despite challenging economic conditions marked by rising interest rates and limited market liquidity. The funds will be instrumental in realizing the gas plant project. “This is a significant indicator of increasing investor confidence in our company’s reputation, brand, and performance,” CEO at Axxela Bolaji Osunsanya said. “The bond proceeds will support the development of our growth projects, signifying the importance of local and international capital markets in the development of critical infrastructure.” With the FID and successful bond issuance, Axxela looks to advance Nigeria’s gas infrastructure, support the energy transition, and meet the increasing demand for cleaner energy solutions.

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Côte d’Ivoire steps up efforts to secure more gas supplies


Côte d’Ivoire has become home to one of Africa’s most resilient energy sector thanks to its gas and hydropower potential, whose development has provided baseload and reliable power for decades. The west African country currently relies on gas supplied by domestic fields for almost 70% of its electricity production. A little over a decade ago, access to electricity in Côte d’Ivoire stood at only 34%. Today, that rate has grown to close to 70%. But with offshore fields maturing and new gas turbines nearing commissioning, the country needs to find more gas to keep power stations working for the foreseeable future and secure electricity supply for end users. “Securing gas supply to keep the lights on in the future has become a serious concern for local authorities,” one executive told Hawilti during a working visit to Abidjan earlier this year. Gas-to-Power Capacity on the Rise Last year, the country added 180MW of gas-fired power generation capacity to its electricity grid after it expanded the Azito plant. At an official ceremony announcing the expansion of the plant, Côte d’Ivoire’s Minister of Mines, Petroleum and Energy Mamadou Sangafowa Coulibaly said the country aims to increase power generation capacity from its current 2,369MW to 4,000MW by 2025. To bring the country closer to that target, a new gas powered thermal-plant is under construction, with a capacity of 390MW. The Atinkou plant ties into government’s efforts to meet increasing local demand as well as exports to neighbouring countries. The Atinkou Gas Power Project is also designed to displace inefficient and old thermal plants. According to the Africa Development Bank, a development partner on the project, the new power plant, when completed, will be the most efficient gas power plant in Côte d’Ivoire and the West Africa region. Short-term options to boost domestic gas demand To secure more gas, Côte d’Ivoire is focused on maximizing production from existing fields, developing discovered marginal gas fields, and monetizing associated gas from large and upcoming offshore oil projects. Most of Côte d’Ivoire’s gas supplies come from CI-27, a license operated by Foxtrot International where production started in 1999. To increase output, the independent completed a 5-well drilling campaign in 2022. The country’s national oil company (NOC) PETROCI is also being put to the task. Earlier this month, it signed the production sharing contracts (PSC) for blocks CI-523 and CI-525, two licenses that hold the Ibex, Gnou, Kudu and Eland gas fields. When developed, these reserves could provide a steady domestic supply of 60 MMscf/d of natural gas over 16 years. First gas is expected in 2026. Eni’s newly discovered reserves at Baleine on Blocks CI-101 and CI-802 have also brought about some respite. The Italian major has found some 2.5 billion barrels of oil and 3.3 Tcf of gas, providing an opportunity for more domestic supplies. On August 2nd, it signed a gas supply agreement with Côte d’Ivoire to ensure that, as it develops oil reserves for the export market, gas is also reserved to meet local demand. “The signing of this gas sale and purchase contract is a breath of fresh air,” declared Côte d’Ivoire Energies (CI-ENERGIES) Noumory Sidibe during the signing ceremony. What’s next? To grow its gas sector, Côte d’Ivoire is hoping that exploration will yield additional discoveries. In early 2024, Foxtrot International will notably be conducting exploratory drilling on Block CI-12 with the Topaz Driller rig contracted from Vantage Drilling, in hopes to find more gas. But given growing gas demand, Côte d’Ivoire is also considering several import options, including pipeline and LNG. Discussions have been held with Ghana regarding a possible pipeline from its Western region, which houses most of Ghana’s gas receiving and processing infrastructure. Another option could come from the Nigeria-Morocco Gas Pipeline, whose route will cross Côte d’Ivoire. In June 2023, PETROCI was one of the companies that signed a memorandum of understanding (MoU) with Nigeria’s NNPC and Morocco’s ONHYM to reaffirm its commitment to the project.

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