Victoria Oil & Gas agrees gas supply deal in Cameroon

Victoria Oil & Gas has agreed a deal to supply gas for two power stations in Cameroon run by energy company ENEO.

VOG said its subsidiary Gaz du Cameroun (GDC) would supply the 30 megawatt Logbaba and 20 megawatt Bassa power stations in the city of Douala under a two-year contract.

ENEO's schedule requires 50 megawatts of power to be online by the end of the first quarter of 2015.

GDC has also signed a legally binding term sheet with ENEO and UAE equipment supplier Altaaqa Alternative Solutions Projects. AASP will provide power generation equipment and has responsibility for importing and installing generation sets at the Douala power stations. GDC will work with Altaaqa to make the initial gas connections.

The term sheets have been signed to enable the project to be expedited to meet ENEO requirements and it is expected that these will be replaced by full contracts in early 2015.

VOG said: "The agreement with ENEO is a major gas supply contract for VOG in terms of scale and profitability with guaranteed minimum take or pay gas consumption at a fixed US$9/mmbtu over the 2 year contract term. The contract can be extended by mutual agreement.

VOG chairman Kevin Foo said: "Today's agreement with ENEO is truly a game changer for VOG. We have secured a major, near-term user of gas for our Cameroon business.

"We are now becoming an active part of the Cameroon energy equation. GDC and Altaaqa have been tasked by ENEO to meet an aggressive schedule to supply gas to the two power stations and we expect to deliver gas on time during the first quarter of 2015.

"Adding annual average take or pay consumption of ENEO to our current production indicates average minimum production levels for 2015 of 10.4mmscf/d."