Seplat Petroleum Development Co. successfully raised $260 million in debt to fund the completion of a key gas project it jointly owns with the state oil company.
Funding for the Assa North-Ohaji South gas project was provided by a consortium of seven Nigerian and international lenders, including Stanbic IBTC Bank, Zenith Bank Plc, and Mauritius Commercial Bank, Seplat said in a statement published on the Nigerian Stock Exchange website. Funding commitments of more than $450 million were received, a “significant over-subscription and a strong sign of confidence in the project,” the company said.
Nigeria, Africa’s top oil producer, is trying to shift away from its reliance on crude by encouraging investments to develop its more than 200 trillion cubic feet of proven gas reserves. Seplat and state-owned Nigerian National Petroleum Corp. established the ANOH project in 2017, one of seven in the country, and plans to deliver its first supply next year.
London-listed Seplat is boosting investments in gas to stabilize revenue after facing plummeting demand for oil in 2020, as the Covid-19 outbreak resulted in widespread restrictions and falling demand worldwide.
Construction of the gas-processing plant, with a daily capacity of 300 million standard cubic feet, is now estimated to cost no more than $650 million, down from an original projection of $700 million, according to Seplat.