Gaz du Cameroun (GDC), a wholly-owned subsidiary of Victoria Oil & Gas (VOG), has signed a non-binding term sheet with Aksa Enerji Uretim (Aksa Energy) to supply up to 25 million standard cubic feet per day of gas for the latter’s proposed power station.
The 150MW power station will be built in Douala, Cameroon near the Bekoko substation, which is close to GDC’s existing gas pipeline network.
Earlier this month, Cameroon Minister of Water Resources and Energy, on behalf of the Government of the Republic of Cameroon signed a memorandum of understanding (MoU) with Aksa Energy to develop the power plant project.
Victoria Oil & Gas CEO Ahmet Dik said: “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 have 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.”
Completion of the term sheet is subject to government approvals and the signing of a power purchase agreement (PPA) by Aksa Energy with Eneo Cameroon (ENEO) or Sonatrel.
Some of the key commercial terms between Aksa Energy and GDC include a gas price of $6.75 per metric million British thermal units for a term of 25 years, with an option to extend for an additional five years and 70% take or pay component.
With an operational base in the port city of Douala, Gaz du Cameroun is a fully integrated producer and distributor of onshore gas.