Victoria Oil & Gas Plc, whose wholly-owned subsidiary, Gaz du Cameroun S.A. ("GDC"), is the fully integrated onshore gas producer and distributor with operations located in the port city of Douala, Cameroon, is pleased to announce that it has signed a non-binding term sheet with Aksa Enerji Uretim A.S. ("Aksa Energy") ("Term Sheet") to supply Aksa Energy with up to 25mmsfd of gas to Aksa Energy's planned 150MW power station, to be located in Bekoko, Douala, Cameroon.
The Term Sheet is subject to various conditions precedent, including government approvals and the signing of a Power Purchase Agreement by Aksa Energy with Eneo Cameroon S.A. ("ENEO") or "Sonatrel" (the Cameroon Government owned manager of the national electricity network). The key commercial terms between Aksa Energy and GdC include:
· Gas Price: US$6.75 per mmbtu;
· Term: 25 years, plus option to extend for an additional 5 years; and
· 70% Take or pay component.
Aksa Energy is one of the largest independent power producers in Turkey, selling 14 TWh/year of energy globally.
On 2 July 2019, the Minister of Water Resources and Energy of Cameroon ("Minister"), on behalf of the Government of the Republic of Cameroon, and Aksa Energy, entered into a Memorandum of Understanding to develop a 150MW of power plant project in Douala, subject to receipt of the requisite approvals and licenses.
The location of the proposed power plant is expected to be near the Bekoko substation, near to GDC's existing gas pipeline network.
GDC's management has been working closely with Aksa Energy and ENEO to develop this exciting gas-to-power project, and GDC, Aksa Energy and ENEO gratefully acknowledge the support and guidance they have received from the Minister.
The Term Sheet, which the Company expects to lead to a long term grid power contract requiring natural gas from GDC gives support to the long term field development plans of GDC in Cameroon for both the Logbaba Field and Matanda Block in order to deliver the contracted gas for this project.
Ahmet Dik, Chief Executive Officer of VOG commented:
"Considerable progress has been made in our Gas-to-Power strategy, as evidenced by the term sheet signed with Aksa Energy, one of the largest global independent power producers. Upon commencement, which is planned for late 2020, production levels would dwarf the current level of gas sales and propel VOG into a profitable trajectory of growth which has always been our aim. Much work and effort by all stakeholders has gone into progressing this project and I am confident the additional power expected to be generated will be highly beneficial for the Cameroonian people and the economy as Douala continues to attract industry into the busy port town.
We are delighted to have begun a partnership with such a high-profile, professional and reputable company such as Aksa Energy which has a depth of experience in installing and operating successful gas facilities across Africa. Additionally, I would like to thank the Government of Cameroon for their support of this project, and we look forward to working closely with them through to the delivery of first gas and power."