Six joint venture domestic and international oil companies, on Thursday, signed a Gas Supply Agreement for the supply of natural gas for a 500 megawatts power project valued at over $250m (N115bn at the official exchange rate of N461/$).
Partners in the deal include Proton Energy Limited, Nigerian National Petroleum Company Limited, Shell Petroleum Development Company of Nigeria Limited, TotalEnergies EP Nigeria Limited, Nigerian Agip Oil Company Limited, and Gas Aggregation Company Nigeria Limited.
At the signing ceremony in Abuja, the Executive Vice-Chairman/Chief Executive Officer, Proton Energy, Oti Ikomi, said the $250m power plant would be built in two phases, with the first phase delivering 150MW of electricity to the national grid, while the second phase would add 350MW and expand the plant’s capacity to 500MW.
He said the long term GSA with the JV partners would see to the development of the 500MW Proton Delta Sunrise project, adding that the first phase would reach commercial operations in 2025, delivering incremental power to the grid.
“Nigeria currently scores low on major indices tracking the supply of reliable electricity to its population and the agreement is in line with the government’s twin objectives of accelerating the development of a robust electricity sector and better utilising its gas endowment for the betterment of its citizen.
“The successful implementation of the project, combined with other electricity value chain initiatives that are currently underway, will help to lay the foundations, in the medium term, for an era characterised by the supply of reliable and affordable electricity for the general populace.
“It is expected that this will dramatically improve standards of living, catalyse economic growth and help transition Nigeria into an upper middle-income economy,” Ikomi explained.
He described the plant as an advanced Integrated Power Project which, with the support of regulatory and financial sector stakeholders, had the potential to reach financial close by the end of 2023.
He said the firm was also supporting the integration of renewable energy source onto the national grid, adding that the 500MW project had been designed to minimise its environmental footprint by utilising available domestic gas supplies, which in many cases was flared.