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West Africa-focused gas producer, Gasol plc (LSE:GAS), has inked the deal which will allow the company to market gas in the region, the company announced today.
In a statement, the AIM-listed firm said it signed the joint venture agreement with Societe Bengaz S.A. (BenGaz), to form a company to be named Cogaz S.A., which will market gas to West African countries, including Togo, Benin, and other countries in the future.
The formal agreement comes after Gasol secured a memorandum of understanding with Communaute Electrique du Benin (CEB), the electric authority of both Benin and Togo, giving Cogaz its first customer for its gas.
Under the terms of the JV, all natural gas to be sold by Cogaz will be purchased from Gasol or from one of its affiliates.
“We are pleased that we have been able to make progress with our plans so quickly,” Chief Operating Officer, Alan Buxton said of the deal, which was agreed in principle three months ago, in 3rd September.
Gasol, a UK-incorporated firm, seeks to become a major gas supplier in West Africa and beyond by positioning itself in the gas to power market, to become a producer and distributor of gas in the region.
The company has secured a first priority on gas produced by independent oil and gas producer, Afren plc (LSE:AFR), through Gasol’s subsidiary, African LNG Holdings Limited, whilst actively searching for equity interests in power generation projects in the region.
In addition, Gasol will also provide management assistance to Bengaz in respect of the latter’s 2% stake in the 690-kilometre offshore West African Gas Pipeline (WAGP).
First gas to be transported through the WAGP, however, will not be available after 2017, according to Gasol, moving the company to provide a “regasified LNG” through a “Floating Storage Regasification Unit” (FSRU).
Gasol shares, quoted on the Alternative Investment Market of the London Stock Exchange, gained 9.9% to 12.50 pence by 11 AM GMT, following the news.
