NNPC and Falcon Petroleum seal gas pact

Apr 20, 2005 02:00 AM

In furtherance of its objective of developing an efficient gas industry capable of serving the domestic energy and feedstock markets in the country, the Nigerian National Petroleum Corporation (NNPC), has entered into a N 1 bn agreement with Falcon Petroleum, an indigenous internal piping and gas conversion company, for the supply of natural gas to industries in Ikorodu area of Lagos.
As part of the agreement, the NNPC through its subsidiary -- Nigerian Gas Company -- has appointed Falcon Petroleum as the gas distributor for Ikorodu gas distribution zone under a Build Operate and Transfer (BOT) arrangement which is expected to last for 20 years.

The Managing Director of the Nigerian Gas Company, Engineer Chris Ogiemwonyi who confirmed this in Lagos, stated that the first and second phase of the project would be completed in 2007 while gas delivery commences early 2006.
His words: "It is important to note that between 1997 and 2002, NGC signed gas sales and purchase agreement with seven Ikorodu customers. The implementation of the gas supply project, would have delivered gas to our yearning customers on time. However, in order to completely align the project to the government's desire to open up the gas business for private participation, NGC decided to competitively appoint a distributor for gas in the Ikorodu area.”

“With the appointment of Falcon Petroleum as the distributor for this zone, it is expected that the project implementation will now speedily progress in identified phases so as to ensure gas delivery by early 2006. Phase 1 and 2 of this project is expected to be completed in 2007 with a capital outlay of about N 1 bn. The gas off-take by the potential customers is expected to grow from about 1 mm cfpd to about 9 mm cfpd in year 2010.”
“Being a commercial venture geared towards achieving the monetisation of the nation's gas resources, the cash flow projections will no doubt support the investment with possibility of future expansion."

Engineer Ogiemwonyi further disclosed that the choice of Falcon Petroleum as the Franchise gas distributor for Ikorodu zone was based on the company's technical and commercial competence in the area of gas utilisation.
"We are confident of the technical and commercial competence of Falcon as a viable gas distributor who has shown commitment to bringing gas to the doorstep of willing end- users. We will make necessary arrangement for the formal assignment of our respective gas sales and purchase agreements (GSPA) to Falcon," he noted.

The NGC boss re-affirmed the company's unflinching commitment towards the successful implementation of the project and urged industries to switch over to natural gas stressing that "natural gas is a cheap, reliable and clean energy resources for industries."
The Managing Director of Falcon Petroleum Limited, Dr Joseph Ezigbo, told that thirteen industries in Ikorodu have already confirmed their readiness to convert to natural gas. Said he: "Our franchise is a reality. Our company has the expertise to convert as many companies as possible to natural gas if they are ready. We have converted about 45 companies in Agbara and Ilupeju industrial zones.”

“Currently, our engineers are working on two new sites at Aluminum Rolling Mills and Fine chemicals. Not only are we going to bring gas to our customers, we will also ensure that we make use of the best practices.”
“We have patiently and doggedly followed this journey and will not disappoint NGC and our esteemed customers who have reposed enormous confidence us."

Source: Vanguard
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