Seven Energy Seeks Mergers to Boost Gas Production
Nigeria’s Seven Energy International Limited is seeking to merge or enter a partnership with other companies to expand gas production to meet rising demand from power plants and industries in Africa’s largest economy.
“The company has had a few discussions with indigenous companies,” its Chief Operating Officer, Jeff Corey told Bloomberg in an interview in Lagos.
“We could invest or operate the gas plant and market the gas for them.”
Seven Energy, based in Lagos, plans to increase gas output more than fourfold to 500 million standard cubic feet (14.2 million cubic meters) per day by 2019 from 110 million, Corey said. Meeting that goal is dependent on getting access to reserves and raising funds, he said.
Hydrocarbon assets in the country with an estimated value of $5.8 billion may be sold by international energy companies to Nigerian-owned producers in coming months, according to Bloomberg Intelligence analyst Philipp Chladek.
Royal Dutch Shell Plc, Chevron Corp., Total SA and Eni SpA are among those divesting interests in onshore and shallow water oil fields plagued by unrest, violence and theft in the Niger River delta.
Natural gas is at the heart of a government plan to increase electricity generation and end crippling shortages by making the fuel available to independent power generators. Nigeria has Africa’s biggest reserves.
“We’re interested in how we can help develop the gas in these oil blocks for power generation and industrial consumption,” Corey said.
An agreement will be announced this week under which Seven Energy will supply gas to the 504-megawatt Alaoji power plant in the southeast, he said.
Existing clients include the National Integrated Power Project that runs a 560-megawatt plant in the city of Calabar and Port Harcourt-based Notore Chemical Industries Plc, which uses the fuel to power its fertilizer plant.
Seven Energy raised $400 million in October to extend its existing 260-kilometer (162-mile) pipeline network. Domestic gas demand is projected to grow 11 percent a year to reach 7.2 billion cubic feet per day by 2025 from 1.8 billion cubic feet in 2012, Corey said.