Seplat Petroleum Development Company Plc operator of the NNPC/SEPLAT JV, has signed a Memorandum of Understanding, MOU, to boost gas supply to the Nigerian Electricity Supply Industry, NESI.
Parties to the MOU include the ministries of Petroleum Resources and Power, in conjunction with the Central Bank of Nigeria, CBN, and the National Electricity Regulatory commission, NERC, as well as NNPC, SEPLAT and Gas Aggregation Company Nigeria Limited.
Under the terms of the MOU which will subsist until December 31st, 2017, the CBN will set up a special purpose vehicle which will provide a facility under the CBN-Nigerian Electricity Market Stabilization Facility (CBN-NEMSF) to offset IRP and Legacy Gas Debts owed by NESI to the gas sector.
Dignitaries present at the signing ceremony included Diezani Alison-Madueke, Minister of Petroleum resources, Godwin Emefiele, CBN Governor, Professor Chinedu Nebo, Minister of Power, Dr. Eyo Ekpo from NERC, Chairman/CEO NERC, Kunle Allen, MD GASM, Austin Avuru, CEO Seplat and many others.
Speaking at the ceremony, the Minister of Petroleum Resources noted that the CBN-NEMF intervention will help “settle legacy debts amounting to over N36.9bn thus bringing closure to the problems of the power sector.”
Following the signing of the MOU, SEPLAT will be paid an outstanding N7billion owed by defunct Power Holding Company of Nigeria, PHCN, and PHCN successor companies.
Seplat will, thereafter, under the terms of the MOU boost its gas supply to the domestic market to 430MM scfd by 2017 in line with the existing Gas Sale and Aggregation Agreements.
The MOU supports the FG and Petroleum ministry’s agenda.
Commenting on the new deal, Austin Avuru, CEO of SEPLAT said “the new MOU is in alignment with our domestic gas commercialization strategy. The offsetting of outstanding debts will provide us with much needed funds to ramp up facility expansion and upgrades leaving us on course to achieve our short to medium term gas objectives while supporting the federal government’s gas to power policy and initiatives.”