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Wednesday, December 31, 2014
Victoria Oil & Gas’ (VOG) wholly owned subsidiary, Gaz du Cameroun (GDC), signed a legally binding term sheet with ENEO Cameroon S.A., Cameroon’s integrated utility company, to supply gas to two power stations in Douala.
The company also signed a legally binding term sheet with ENEO and Altaaqa Alternative Solutions Projects DWC-LLC. Altaaqa will provide power generation equipment and
has responsibility for importing and installing the Gensets at the Douala power stations. GDC will work with Altaaqa to make the initial gas connections.
The term sheets have been signed to enable the project to be expedited to meet ENEO requirements and it is expected that these will be replaced by full contracts in early-2015.
The agreement with ENEO is a major gas supply contract for VOG in terms of scale and
profitability with guaranteed minimum take or pay gas consumption at a fixed $9/mmbtu over the two-year contract term. The contract can be extended by mutual agreement. The take or pay element gives GDC the necessary incentives to allocate significant levels of gas to a single customer. The minimum take or pay levels are 9 Mmscf/d in the January-June dry season and 3 Mmscf/d in the July-December wet season. GDC anticipates actual demand from ENEO will be higher than the minimum take or pay levels during both seasons. ENEO requires all 50 MW of power to be online by the end of Q1 2015.
The Bassa Power Station is located near VOG’s northern pipeline and the Logbaba Power Station is located near the proposed eastern leg off the company’s main line. The pipeline construction to Bassa has been completed to the power station boundaries and GDC has started pipeline construction towards the Logbaba power station; this work is scheduled to be completed by mid-January 2015.
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