Savannah Energy Plc says a new Gas Sales Agreement between its subsidiary, Accugas, and Mulak Energy Limited will lead to 40 per cent savings in energy costs and 30 per cent reduction in carbon footprint.
In a statement made available to Financial Street on Saturday, the company hinted that the GSA would run for an initial seven-year term.
“The agreement for the supply of gas to Mulak’s Compressed Natural Gas Nigerian project represents Savannah’s first Gas-to-CNG sales agreement.
“Mulak initially plans to distribute CNG to its industrial customers in Rivers State with the CNG to be substituted for diesel in generators supplied by the Mantrac Group systems and equipment. This is expected to provide Mantrac customers with up to 40 per cent savings in energy costs and 30 per cent reduction in their carbon footprint,” Savannah Energy explained.
It noted that the sales under the GSA were expected to commence in 2022, as Mulak has indicated interest in expanding its CNG sales on a pan-Nigeria basis to Mantrac customers.
The Chief Executive Officer of Savannah Energy, Andrew Knott, said, “This recognises Accugas’ status as the most reliable supplier of natural gas in Nigeria. Our first Gas-to-CNG agreement is hugely exciting, as it represents Savannah’s entry into the CNG market, which we see as offering strong growth potential for our business over the course of the next decade.
“The CNG market significantly extends the reach of our existing 260km pipeline network into light industrial and even domestic power generation without the need for further investment in pipelines.
“We look forward to providing them and their customers with a reliable, lower cost source of energy for power generation with an estimated 30 per cent reduction in the carbon footprint of their existing diesel generators.”
Also, the CEO of Mulak Energy, Omar Hassan, said, “We are certain that gas will play a central role in fuelling Nigeria’s growth and prosperity for the foreseeable future and are proud to be participants in this important development.
“We foresee that this agreement with Accugas-Savannah will serve as a platform for increased cooperation between our two companies, as we work to achieve our shared vision of bringing even larger volumes of gas to the Nigerian market, creating value for our shareholders and ultimately the industries and people of Nigeria.”