Oil and gas firm Seven Energy has secured a $495 million loan from a consortium of Nigerian and international lenders to help fund its spending to supply gas to the domestic market, an adviser on the deal said on Wednesday.
Seven Energy, an indigenous Nigerian company, plans to buy gas fields along with the related infrastructure and pipelines so it can sell gas into the domestic market for use in power generation and industrial consumption.
Demand for gas in Africa's biggest economy is expected to rise to 3 million standard cubic feet (scuf) per day by 2017 as gas-fired power plants ramp up generation, industry officials say. Gas demand has risen to 1.2 billion scuf per day four times the 300 million of six years ago.
Nigeria privatised its electricity sector 18 months ago in a bid to end decades of blackouts which have hampered economic growth. Most of the plants sold were gas-fired and operating below capacity due to inadequate gas supply.
Accugas Limited, a wholly-owned subsidiary of Seven Energy, processes and distributes gas in Nigeria. It has already invested $1 billion in related projects in the southeast.
Seven Energy's senior secured term loan is provided by: First Bank, Ecobank, United Bank for Africa , Union Bank, FCMB, FBN Bank UK and Union Bank UK, the financial adviser said in a statement.
Last year, the oil and gas company secured $255 million from equity investors, including Singapore state investor Temasek Holdings, to help build up its gas business.
Part of the new debt will also be used to refinance existing loans and fund working capital.
Rival firm Seplat, listed in Lagos and London , is aiming to have a 20 percent share of the domestic gas market by 2018. It plans to increase gross output from about 120 million scuf per day to 400 million by 2017.
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