Seplat to Raise $200 Million From Banks for Nigerian Gas Project

LAGOS (Capital Markets in Africa) – Seplat Petroleum Development Co. plans to raise $200 million in loans from banks to fund a gas project it jointly owns with the Nigerian government.

It will appoint an arranger “shortly after” an investor meeting scheduled for June 26, Chief Financial Officer Roger Brown said on Thursday in Lagos, Nigeria’s commercial capital. It will raise an additional $80 million through vendor financing, or equipment suppliers, to complete its financing requirement for a gas project known as Assa North-Ohaji South, which is scheduled to start production next year, he said.

Seplat and state-owned Nigerian Gas Co., a unit of the Nigerian National Petroleum Corp., established the project 2017, with each contributing $210 million and ANOH sourcing the balance of its needs as debt. ANOH is targeting Nigerian banks and international lenders, Brown said.

Seplat, which is listed on the London and Nigerian exchanges, is investing in gas to stabilize revenue amid volatility in the oil industry, according to the CFO. The gas plant has an initial capacity of 300 million standard cubic feet per day and plans to deliver its first supply by 2021.

Africa’s biggest crude producer is encouraging investments in gas infrastructure to diversify the economy away from oil.

Seplat is targeting output of 49,000 to 55,000 barrels of oil equivalent a day this year and will probably add 8,000 barrels by next year as it ramps up production, Brown said.

Source: Bloomberg Business News