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New Thermal Gas Connections and Production Update, Cameroon

8 Jun 2015

Highlights

·        Three new thermal customers online, including Dangote Cement Cameroun S.A. (“Dangote”)

·        Expected additional daily gas consumption of 0.7mmscf

·        Average production rate for May was 12.4mmscf/d

·        Focus now on production build out on Bonaberi side of Wouri River

Victoria Oil & Gas Plc today announces that its 100% owned subsidiary, Gaz du Cameroun S.A. ("GDC"), has completed connections and is supplying natural gas to three new industrial customers from its gas pipeline network in Douala. The connections include the new Dangote cement clinker plant located on the southern shore of the Wouri River, Douala.  

The construction of the 1.5 million tonnes per year clinker cement plant by Dangote is a reflection of the significant commercial growth occurring in the port-city, Douala, which is a major regional manufacturing and trade hub, with seaborne access and developed infrastructure.

In addition, GDC is now supplying gas to New Foods, a food processing business owned by major conglomerate the Fokou Group, and Société Industrielle Camerounaise des Cacaos S.A. (“Sic Cacaos”), a subsidiary of Barry Callebaut, which are a Swiss-owned chocolate group and one of the world’s largest producers of cocoa.

Sic Cacaos recently increased its capacity from 32,000 to 50,000 tonnes per year of cocoa and now accounts for 25% of total Cameroon production.  

Notably, both of these new customers have converted their operations from heavy fuel oil to natural gas.

The total estimated additional daily consumption from the three new connections is 0.7mmscf.

A summary of the gas production figures for the months from January 2015 to the end of May 2015 is shown below:

Logbaba Production Figures (mmscf/d)

       
           
 

Jan-15

Feb-15

Mar-15

Apr-15

May-15

Monthly Average

4.0

4.1

5.5

11.3

12.4

Mon-Fri 5 Day Average

4.6

4.4

5.8

11.7

12.8

Peak daily

5.0

4.8

9.2

16.9

16.2

Condensate (bbls)

1,812

1,587

2,946

4,532

5,366

April and May figures reflect some seasonal variations in demand from thermal customers and steady build-up of gas consumption by ENEO Cameroon S.A. Average daily gas consumption for the first five days of June was 16mmscf/d.

Kevin Foo, Executive Chairman, said: “We welcome Dangote, New Foods and Sic Cacaos as important new thermal customers for GDC. This is confirmation that industries will expand their operations when they can be guaranteed consistent supply of energy without the need for storage or transportation. Gas supply to the Bassa and Logbaba power stations is steady and we are now focussing on additional customers in the Bonaberi industrial area across the Wouri River. Our monthly average gas consumption is triple the February average and we expect to exceed our 10.5mmscf/d target for the calendar year 2015.”