Savannah Energy (SAVE) has announced that its 80%-owned subsidiary Accugas has entered into a new sales agreement with Notore Chemical Industries, a Nigeria-based chemicals and infrastructure company.
Under the agreement, Accugas will deliver up to 10 MMscfpd of gas to Notore on a reasonable endeavours basis, contingent on availability, for an initial period of 1 year with an option to extent for a mutually agreed period.
Notore's fertiliser plant is connected to the Accugas network via the Nigerian Gas Company pipeline from Ikot Abasi. Therefore, no further capital expenditure is required by Accugas to deliver gas to Notore.
Andrew Knott, CEO of Savannah Energy, commented: "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"
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Today marks another large contract win for Accugas, following June's 35 MMscfpd TransAfam Power Limited and 65 MMscfpd First Independent Power Limited deals.
Markets welcomed today's news, sending SAVE shares up 4%. Its shares are now up 26.2% in 2022 and up 63% in the past 12 months, as the company continues to grow and deliver positive trading results. Accugas has recorded growth in revenues for each of the last five years, with an impressive realised CAGR of 15%.
In June, Savannah published FY21 results, which showed revenue up 6.8% to £230m, boosted by higher gas prices and exceeding previous guidance. Average gross daily production from the company's Nigerian operations was 14% higher year-on-year, and the average realised gas price of $4.19/standard cubic foot was 6% higher year-on-year.
Moreover, Savannah is growing its renewable energy division, with several new large-scale greenfield opportunities under review and negotiation in Chad and Niger. In Chad, the company has signed a deal with the Ministry of Petroleum and Energy for the development of up to 500 MW in renewable energy projects. In Niger, Savannah is developing the 250 MW Parc Eolien de la Tarka Project. CEO Andrew Knott sees Africa's transition to renewable energy as playing a significant role in Savannah's future growth.
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