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First Bank, UBA, others seal $225m gas infrastructure deal

By The Citizen
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Four banks, First Bank of Nigeria Plc, United Bank for Africa Plc, FCMB Plc and Stanbic IBTC, on Tuesday, signed a $225m syndicated medium-term facility with Accugas Limited, a gas processing, marketing and distribution company owned by Seven Energy International Limited.

Speaking during the signing of the refinancing and expansion facility in Lagos, the parties involved said it would be utilised to refinance the existing $55m debt secured by Accugas for its gas pipeline project in Akwa Ibom State, while the balance of $170m would be used to part-finance the cost of expanding the company's gas processing facilities.

They added that a new gas pipeline that would supply gas to the Calabar National Independent Power Project plant would also be built from the $170m balance.

Available details of the transactions revealed that FBN Capital Limited, a subsidiary of FBN Holdings Plc, acted as the global coordinator bank, financial modelling bank and also undertook the role of de-facto financial adviser to the borrower; while UBA, First Bank, Stanbic IBTC and FCMB jointly acted as mandated lead arrangers on the transaction.

The Executive Vice-President, Institutional Banking, First Bank, Mrs. Bashirat Odunewu, said, 'First Bank is very proud to invest in Accugas Limited as the project is uniquely aligned with the Federal Government's vision of harnessing the nation's immense gas reserves and developing the country's domestic gas supply infrastructure.'

She added that the project would assist in bridging the gas deficit for power generation in the country.

The Chief Executive Officer, Seven Energy, Mr. Philip Ihenacho, described the Calabar project as the second phase of Accugas' gas processing and distribution development programme aimed at bringing the substantial gas reserves from the South East and Niger Delta to the market to meet the growing energy demand from power plants and industrial users in the region.

The project, according to him, involves the construction of a 37-kilometre gas pipeline from the Uquo gas field in Akwa Ibom State to Oron for delivery of 131 MMscfpd of gas to the 560-Megawatts power plant in Calabar.

Construction of the new pipeline, he said, was scheduled to be completed in July 2014.

Speaking on the transaction, Ihenacho, said, 'The successful signing of the Accugas financing clearly shows the confidence that the financial institutions have in Accugas and Seven Energy, as well as the prospects for the Nigerian gas market.'

The Chief Financial Officer, Seven Energy, Mr. Bruce Burrows, who corroborated Ihenacho, said, 'The completion of the Accugas financing marks a major milestone in the project's evolution. With construction of the Ibom gas pipeline (phase 1) now complete and on track to deliver gas to the Ibom Power Plant from April 2013, we are now embarking on the second phase with the construction of the Calabar gas pipeline already commenced.'