Proton Energy, partners sign $250m gas supply deal for 500MW power project
Proton Energy Limited has signed a deal with the Nigerian National Petroleum Company Ltd (NNPC), Shell Petroleum Development Company (SPDC), TotalEnergies, the Nigerian Agip Oil Company Limited (NAOC) and the Gas Aggregation Company Nigeria Limited (GACN) for the supply of natural gas for its 150 MW first phase of the Proton Delta Sunrise project.
The signing of the long-term gas supply aggregation agreement is a milestone in the development of the company’s 500 MW planned facilities which will be built in two phases. The first phase will deliver 150 MW of electricity to the national grid, while the second phase will add a further 350 MW.
According to the firm, it is expected that the first phase will reach commercial operations in 2025 and deliver the much needed reliable incremental power megawatts to the national grid.
Speaking at the event, the Executive Vice Chairman and Chief Executive Officer, Mr Oti Ikomi, noted that the deal has been in the works for years.
Ikomi noted that the project worth over $250 million would enhance industrialisation, business and job growth in the country as well as the host communities.
Nigeria currently scores low on major indices tracking the supply of reliable electricity to its population and the agreement is in line with 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 to the general populace.
Besides, it is expected that the project will dramatically improve standards of living, catalyse economic growth and help transition Nigeria into an upper middle income economy.
Ikomi stated that the project is an advanced Independent Power Plant (IPP) project which with the continued support of key regulatory and financial sector stakeholders, has the potential to reach Financial Close by the end of 2023.
“We thank our partners for their dedication towards executing this agreement and their contributions towards the development of a more robust domestic electricity market,” Ikomi stated.
He explained that although the agreement was executed in February, it was important to recognise the work, the amount of negotiation as well as the amount of time and what the project will do for Nigeria.
“This agreement is going to give us a multi-year supply of natural gas to the port on the sunrise project located in Sapele in Delta State. Gas is the most critical supply cost structure in developing a power plant. So we are very proud of this,” he added.
He also highlighted the role played by the African Development Bank (AfDB), Nigeria country office. Ikomi added that Proton Energy Limited will reach the close of a financing decision by the end of the year.
