23. July 2014 Falcon

Falcon Petroleum increases Ikorodu gas supply to 22m CF/d

Industrial firms in the Ikorodu area of Lagos State will soon have cause to boost their production capacities and increase the number of hands they are employing, as Falcon Petroleum Limited, one of the gas companies with the gas franchise to service industries in the area is set to increase its gas in-take from the Nigeria Gas Company (NGC) and move from its current 10 million standard cubic feet per day (scf/d) to 22 million standard cubic feet per day (scf/d) from next month.

This development is expected to provide several direct and indirect jobs for Nigerians.

The company, BusinessDay learnt had at the weekend carried out, what is called ’hot tap’ on the NGC Ecravos-Lagos pipeline that serves most gas users in the Western part of the country.

This is a situation that allows it to connect a new 12 inches pipeline that would take more volume of gas with a higher pressure to its customers. Its old line of four inches could only take just about 10 million scf/d and a maximum of 12.5 million scf/d.

This would enable those industries that have had their installed capacities constrained because of lack of adequate gas to take more of the commodity and expand their production lines in due course. The company has about 16 companies it services but hopes to increase the number soon.

Confirming this to BusinessDay, Jeo Ezeigbo, managing director of the company, expressed excitement that the obsolete four inches gas pipeline, which delivers gas to his company’s facilities, was replaced at the weekend. He said currently the company was doing a minimum of 10 million scf/d, but had an upper limit of 12 million a day, adding that the constraints experienced on the former pipeline had actually limited the capacities of a lot of its customers, who are currently operating below optimal level.

“Many of them had to step back on their expansion plans because, gas pressure and volume have been very low for more than a year. So,c with the project being commissioned it is expected that economic activities would increase in tandem with increased volume of gas by the middle of next month. The sky would be the limit in terms of volume and pressure of gas available to customers,” he said.

On the future plans of the company, he said, Falcon Petroleum intends to go to the capital market in the next two three years because it is the desire of the founders to take it to greater height.

Audrey Ezeigbo, executive director of the company, said with the increase in the volume of gas to the companies in Ikorodu the tempos of economic activities in that area would be high, saying the multiplier effect of this development was unquantifiable as other ancillary services would spring up. There would be direct and indirect employment.

Also commenting on what has made the company thick in the last 20 years, she explained that the venture capital partnership the company had for seven years with Capital Alliance was a testimonial and attestation of how the company had positioned itself internally, in terms of structure, sound policies, culture and governance to make itself attractive enough for that type of investment to come in through Capital Alliance, which up the ante for the company. With this partnership, it opens the doors for cheaper financing and long-term funds for the company, she said.

The fact that a young indigenous player went head to head with international oil companies and was able to come out top was a big achievement for the company, she said, adding that more importantly was its ability to deliver gas to Ikorodu within seven months of the time of signing the franchise agreement, and “this was one of the milestones the company achieved”.

The Falcon boss explained that supply situation to Ikorodu industrial area had been stagnant for eight years after the first gas was delivered to PZ, saying that it was the coming of Falcon Petroleum that changed the dynamics.

Olusola Bello (Source)


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