The two companies will collaborate in developing power generation projects, Compressed Natural Gas (CNG), and small scale Liquefied Natural Gas (LNG) virtual pipeline capabilities for gas-to-power projects on a non-exclusive basis.
“While our main growth initiatives are in the Upstream, we remain steadfast in our commitment to grow our midstream business,” said Wale Tinubu, Group Chief Executive Oando PLC, at the signing ceremony.
Tinubu said that the commitment is evident in the ongoing expansion of Oando’s various assets, including the construction of the fourth phase of its Greater Lagos pipeline to
increase the company’s capacity and customer base. Other such projects include the enhancement of Oando’s Port Harcourt pipeline network, and the growth of its Compressed Natural Gas distribution programme.
“We are delighted to explore the possibility of pioneering initiatives with GE, such as the increase of our power generation by over 100MW, to complement our existing installed capacity of 68MW,” Tinubu added.
A relationship beyond power
In view of the new deal, Oanod and GE plans will together develop the following projects in 2015: 100MW embedded power generation projects in Lagos using 5 GE TM2500 units (FastPower), One 10mmscf/d small scale LNG facility to serve identified markets at distances greater than 300kms away from the gas distribution grid, and two CNG facilities to serve local markets in Lagos and Port Harcourt environs.
The companies have also agreed to, by the end of December of 2014, secure funding for the projects. Hence, GE has committed to working with Oando to provide comprehensive “sales and project financing” project management capabilities. These will deliver a competitive financing package to Oando.
The companies also seek to negotiate and execute contracts with appropriate terms and conditions for GE equipment/services, enabling supply chain management of inventory for the Projects. This process is expected to be concluded by the end of December. Both companies also plan to establish a leadership development paradigm for Oando via GE resources.
“We pioneered gas distribution in the Greater Lagos area, and our present positioning allows us to benefit from our first mover advantage and significantly increase our industrial and commercial customer footprint by expanding and linking eastern, western, and northern Nigeria in the near to midterm,” said Bolaji Osunsanya, Chief Executive Officer of Oando Gas Power, who highlighted the company’s commitment to growth.
According to Osunsanya, Oando hopes to broaden its scope by investing in unique independent power generation solutions that are critical to the enhanced socio-economic development of Nigeria.
Nigeria’s energy future
The country has in recent times focused on improving its power infrastructure as more than half of its population still lacks access to stable power.
Oando Gas Power, as well as other private entities, had since the privatisation of the power sector in 2013, invested heavily. Oando has focused on aggressively developing the country’s gas infrastructure. It also has several long term projects – all in conceptualization phases – like the 400km SW-NW EIIJ pipeline and the Central Processing Facility which will serve as a gas gathering and processing hub in the Niger Delta.
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