Axxela Limited, formerly Oando Gas and Power, has made a capital expenditure projection of about $147 million to develop its gas supply infrastructure in Lagos and Port Harcourt, Rivers State, as well as the development of the Ajaokuta mini liquefied natural gas in Ajaokuta, Kogi State.
Axxela Chief Executive Officer, Bolaji Osunsanya, in an interview with The Nation, said the amount is a bulk budget for the projects, but these will be carried out in phases and may run for the next two or three years. He also stated that the company is eyeing expansion into regional opportunities and has secured shipping licence from the West African Gas Pipeline Authority (WAGPA), adding that arrangements have been concluded for the first gas supply to a West African country.
Giving a breakdown of the capital expenditure, Osunsanya said the money will be spent more on maximising existing assets of the firm, adding that some of them are organic developments. He said the company wants to build the 5th and 6th phases of its Lagos franchise, Gaslink.
‘’The 5th & 6th Phases will cost the company about $50 million and will be used, in developing sub-segments that will connect Igando to Ikeja, while the mini LNG will cost the firm about $60 million. The Port Harcourt expansion has already cost us about $7 million and the planned expansion to Omagua and Chioba industrial clusters will cost us about $30 million, he added. These are bumper numbers that we will use to develop them but it will be in phases, he said.
He further said: “Gaslink is our Lagos franchise and today we carry 160 customers on it selling about 65 million standard cubic feet of gas per day (mmscfd) and we plan to sell 100mmsfcd from it in the next two to three years.
Therefore, we have to do more expansion and give gas to more factories.
“We are looking at doing Phase 5 which will be from Iba Road on Festac near Lagos State University LASU back to Ikeja; Motorways all the way to Gbagada, which will take us to almost all parts of Lagos, so there should be no industrial part of Lagos that will not have gas supply infrastructure. So, with phases 5&6 in Lagos, we will fully maximize Gaslink.
On the company’s plan for PortHarcourt axis, he had this to say: ‘’We also want to grow Port Harcourt gas grid.We have extended it to Court area, the next thing is to do Omogua industrial cluster, Airport and Chioba industrial cluster and also maximise the total capacity of our compressed natural gas (CNG) plant and use the mini LNG to supplement it.”
On change of name to Axxela, Osunsanya said: “Last year we made an announcement about new investors in Oando Gas and Power. The new investors are Helios Capital Partners, which is the bigger investor. We thought it was necessary to change the name to reflect this new shareholding. They are big African-based infrastructure fund.
They have about $3 billion in assets and investments.
“They are in Airland, ARM pensions, Vivo, and Co-partners in OVH Energy, among others. They have the necessary experience doing infrastructure business in sub-Saharan Africa. The premise of their coming into Oando Gas and Power is that they liked our history as a gas and power infrastructure business and they thought coming and putting in the necessary capital would help us achieve growth. So it is a growth model.
“But our own way of looking at this change is to leverage the two strengths.
Oando on one hand has good market access, a formidable and local content platform and more importantly, Oando gives us access to resources. Oando is a member of the Joint Venture, you can get gas from them and they also allow us access to all their other footprints. Helios on the other hand brings a lot of capital and wealth of management experience running growth companies in Africa. We are already in the last eight or nine months seeing the benefits of this marriage.”
Copyright MMS Plus.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from KINGS COMMUNICATIONS LIMITED.