Savannah Energy, the African-focused British independent energy company sustainably developing high quality, high potential energy projects in Nigeria and Niger, announced today that its Accugas subsidiary has entered into a new gas sales agreement ("GSA") with Mulak Energy. (Logo quoted from Savannah’s official website)

The GSA is initially for a seven-year term. It envisages the supply of gas produced by Savannah's majority-owned Uquo field for an initial two-year period on an interruptible basis and the subsequent five years on a firm contract basis. During the Interruptible Gas Delivery Period, Mulak is able to nominate a maximum daily quantity of up to 2.5 MMscfpd. Volumes in the Firm Delivery Period will be agreed by the parties before the end of the Interruptible Gas Delivery Period. The GSA is priced to reflect Mulak's status as an industrial customer; Accugas, therefore, expects to see its weighted average gas sales price realization increase as a result of this contract, without the need for any incremental capital expenditure beyond our previously announced plans. Sales under the GSA benefit from a bank guarantee arrangement from an investment grade credit rated international bank.

Mulak is a member of the Mansour Group, the leading Egyptian multinational conglomerate with operations in more than 100 countries and annual revenues exceeding US$7.5 billion. The agreement for the supply of gas to Mulak's Compressed Natural Gas ("CNG") Nigerian project represents Savannah's first Gas-to-CNG sales agreement.

Mulak initially plans to distribute CNG to its industrial customers in Rivers State with the CNG to be substituted for diesel in generators supplied by the Mantrac Group, also a member of the Mansour Group and one of the world's largest dealers in Caterpillar machinery, power systems and equipment. Mulak is in a unique position to exploit the synergies with Mantrac's business in Nigeria through the conversion of Mantrac's existing customer base of approximately 400MW of diesel-fuelled generators to CNG-fuelled generators.

This is expected to provide Mantrac customers with up to a 40% saving in energy costs and a 30% reduction in their carbon footprint.  Sales under the GSA are expected to commence in 2022 and, following the initial two-year period, Mulak has indicated that it is seeking to expand its CNG sales on a pan-Nigeria basis to Mantrac customers.

(IRuniverse)

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