By Chijioke Ohuocha
LAGOS, Nov 26 (Reuters) - Nigeria's Oando OANDO.LG plans
to build a gas plant for up to $350 million as it focuses on
integrating gas production with its supply business, the head of
the gas and power unit said on Thursday.
Bolaji Osunsanya, Managing Director of Oando Gas and Power
said the plant, with a capacity to process 300 million standard
cubit feet a day (scfd), will take 24 months to complete and
cost $300 million to $350 million.
He said Nigeria had room to ramp up gas plants as current
capacity was around 2 billion scfd, adding that its project was
at the development stage to be launched in the first quarter.
London-listed Nigerian firm Seplat SEPLAT.LG is also
boosting gas capacity. It plans to increase gross output from
around 120 million to 400 million scfd by 2017, as demand
grows.
"We have done transport in the past, we are getting into
(gas) processing right now," Osunsanya told Reuters in an
interview. "We are working ourselves up the chain."
Oando's gas and power unit reported a net income of $19
million for the nine months to September, down from $22 million
the previous year.
Lagos-listed parent Oando, with interests in oil
exploration, terminals and oil trading, has said it was seeking
approvals to sell its gas and power investment to cut debt and
raise up to 80 billion naira from shareholders.
Two years ago, Africa's biggest economy broke up its
monopoly on power generation and distribution by privatising the
sector, hoping to attract foreign investors.
But the amount of power produced has stagnated since,
failing to reach a 2012 peak of 4,500 megawatts of electricity
due to gas constraints, plant outages and tripped circuits,
according to Transmission Company of Nigeria.
Osunsanya estimated Nigeria will need around $55 billion
over the next seven years to develop gas infrastructure to meet
growing demand, which would include building new pipelines,
processing plants and drilling of new wells.
He estimated demand at 5 billion scfd, of which 3.5 billion
was needed for power and the rest for other uses. However, half
the 7.5 billion scfd gas generated was flared or reinjected into
the ground due to inadequate pipelines for distribution.
(Editing by David Evans)