A flash blog today, I’m in meetings in town.
Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter in Africa, is pleased to announce that the Company’s 80% indirectly owned subsidiary, Accugas Limited, has entered into a new gas sales agreement with Notore Chemical Industries PLC.
Accugas will supply Notore with up to 10 MMscfpd of gas to augment its current supplies. The contracted supply is on an interruptible and reasonable endeavours basis, based on gas availability and nominations, for an initial term of one year, with the option to extend for a mutually agreed period. Notore’s fertiliser production plant is connected to the Accugas network via the Nigerian Gas Company pipeline from Ikot Abasi and no further tie-in or capital expenditure is required by Accugas to deliver gas to Notore.
Notore Chemical Industries PLC, formerly Notore Chemical Industries Ltd, is a Nigeria-based integrated agro-allied, chemicals and infrastructure company located in the Onne Oil and Gas Free Zone area of Rivers state in southern Nigeria. Notore’s primary business is the production of urea, ammonia and NPK blend fertilisers and sale to the Nigerian and international markets. Notore’s facility has a production capacity of 1,500 metric tons (MT) per day of urea and 1,000 MT/day of ammonia.
Andrew Knott, CEO of Savannah Energy, said:
“I am pleased to welcome Notore as a new gas customer to Accugas, representing our tenth customer site in total (versus three at the time of our acquisition of the Accugas business in 2019). We look forward to developing our working relationship with Notore over the course of the coming months and years”
This is yet another sign-up from SAVE who have continued to deliver new customers for Accugas, as CEO Andrew Knott says above, is the tenth new client in two years. A key area in Southern Nigeria, Accugas will supply Notore with up to 10 MMscfpd of gas to augment its current supplies on a one year contract with extensions possible so should be a significant positive to revenue in coming years.
In addition it is an economic no-brainer as Notore’s fertiliser production plant is connected to the Accugas network via the Nigerian Gas Company pipeline from Ikot Abasi and no further tie-in or capital expenditure is required by Accugas to deliver gas to Notore.
Savannah is building a substantial business which I think will become the model for providing gas throughout Nigeria and probably beyond, in the meantime expect more contracts, a stronger and bigger revenue stream and it should feed through to the share price which at 30p is way too low.