Dr. David Ige
Ag. Managing Director
Gas Aggregation Company Nigeria Limited (GACN)

■ Gas Supply Availability
■ Commercial Arrangements for Gas to Power
■ Role of Financial Institutions
■ Gas Aggregation Company Nigeria Limited
■ Contact Details
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Nigerian Gas Reserves Breakdown
Associated Gas = 97TCF
Non-Associated Gas = 90TCF
Total (P1+P2) = 187TCF
Nigeria’s gas potential is enormous. Strategy is to leverage this gas resource significantly for economic growth, with Power Sector being a key part of that agenda
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Mutually-Reinforcing Cycle of Growth (Gas-Power-Industry-Power-Gas)
The nation’s gas agenda is robust. It puts gas-to-power at the core, but also envisions an aggressive gas based industrial growth. This in turn will drive further growth of power demand.
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About 3bcf/d targeted at Power Sector with existing PHCN plants being cardinal base load consumers of the gas. Additional gas will come from other sources such as Independents etc.
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 3 sources of gas have been identified for potential investors in the Power sector.
 Most dominant source in the short/medium term is the DSO
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■ Gas Supply Availability
■ Commercial Arrangements for Gas to Power
■ Role of Financial Institutions
■ Gas Aggregation Company Nigeria Limited
■ Contact Details
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 Access to gas supply by power plant developers
 All existing PHCN plants have a comprehensive gas supply plan

Framework for gas assures long run availability for subsequent expansions
 Bankable Gas Supply Agreements

Pricing Framework

Securitization mechanism for commodity payment default
 Fairly standardized terms, enable speedy close-out of negotiations
 Gas Transportation

Contract based Gas Transportation services
 Finalization of the Gas Transportation Network Code

Development of integrated Gas Transportation Network
Redefined the Commercial Framework for domestic gas supply to assure long run sustainability of supply
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■ Gas Supply Availability
■ Commercial Arrangements for Gas to Power
■ Role of Financial Institutions
■ Gas Aggregation Company Nigeria Limited
■ Contact Details
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 Funding
 Access to long term funds

Structured long term debt
 Working Capital requirements
 Collaboration on loan syndication
 Securitization
 Understanding transactions of each market segment
 Power generation, Transmission and distribution (LV Lines, Transformers, metering)
Financial institutions are crucial to the development of the power sector
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■ Gas Supply Availability
■ Commercial Arrangements for Gas to Power
■ Role of Financial Institutions
■ Gas Aggregation Company Nigeria Limited
■ Contact Details
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 Was created to manage Domestic Gas Supply obligations volumes
 Focal point for Gas Buyers to access DGSO volumes for domestic market use
 Core activities
 Coordinate process for wholesale gas supply from Producers to eligible Buyers

Ensuring a balanced growth of all critical sectors of the economy: Power, Gas
Based Industries and Local Distribution Companies

Conduct due diligence assessment on eligible Gas Buyers

Allocate available gas from the DSO to credible buyers successful on assessment
 Facilitate the expeditious execution of the gas supply and gas transportation between the buyer, seller and transporter respectively
 Operational since Jan 2010

Address:
Telephone:
Email:
1B, Malcolm Fraser Street, Asokoro District, Abuja, Nigeria
+234 (9) 8759045 info@gacn-nigeria.com
Contact Persons:
- Management – Tolulope LUKANMBI email: tolulope.lukanmbi@gacn-nigeria.com
- Management – Solomon MAKINDE email: solomon.makinde@gacn-nigeria.com
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Breakdown of Gas Supply Plan Major New Gas Supply Projects

DSO supply plan comprises existing, many ongoing gas projects and a few major new gas development projects which are about to take off.

70% of this short/medium term plan is targeted at the Power Sector (about 3bcf/d by
2015)
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To assure sustainability of gas supply, a revised transitional pricing structure is in place for gas to Power. Aspiration as market develops is ‘willing buyer willing seller ’ prices.
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Gas Infrastructure Programme for Flexible
Supply
 [2]. Ob/Ob – Oben Link
 Pipeline will bridge the East and West.
Excess gas availability in East.
 Tendering process almost concluded for pipeline
 [1] ELPS Expansion to 2bcf/d
• ELPS-C capacity is 1000mmcf/d.
• Expansion to 2000mmcf/d by 2012 will enable growth of supply to
Western Power plants
 [5]. QIT-Ajaokuta-Kano Line
 Over 1000km line to evacuate gas from Exxon to eastern and northern power plants
 Gas can also be fed from the existing Oben- Ajaokuta pipeline to the North through the Ajaokuta-
Kano Pipeline
  [3]. Link to Eastern Network
  2 projects included here – the Northern
Option pipe link (NOPL) and the Ob/Ob
CPF to NOPL
  Will enable dry gas specification and capacity boost to over 300mmcf/d to east east
• ELPS-A loping to 600mmcf/d capacity ongoing and on track for end Q1 2011
• Will enable additional supplies from
Escravos axis
 Ob/Ob
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 [4] Offshore Oso to QIT link
• Enable additional 300mmcf/d from Exxon by end 2013
• Links Oso to QIT in Akwa Ibom

PRG Revolving Standby L/C Facility
FGN
(Ministry of Finance)
Indemnity
Agreement IDA
PHCN / Genco
(joint buyers)
Gas Seller
GSA
Standby
L/C
L/C
(Commercial) Bank
PRG
Project Agreement
Source: World Bank Presentation
Contractual Agreements with no regular Payment flows
Contractual Agreements & regular Project Payment flows
Payment flows in the event of a Breach of the Power Purchase Agreement