San Leon Energy PLC is investing $15 million in Energy Link Infrastructure (Malta) Ltd. (ELI), the company which owns the Alternative Crude Oil Evacuation System (ACOES) project in Nigeria. ACOES is being built to provide a dedicated oil export route from Oil Mining License (OML) 18, comprising a new pipeline and a floating storage and offloading vessel (FSO), ELI Akaso.
The ACOES pipeline component is expected to have a throughput capability of 100,000 b/d of oil, while the FSO has a storage capacity of 2 million bbl of oil. Once commissioned, ELI’s charges are expected to be comparable to current NCTL handling fees.
Once commissioned, OML 18-operator Eroton Exploration & Production Co. expects ACOES to reduce downtime and pipeline losses associated with current transport on the Nembe Creek Trunk Line (NCTL) to below 10%. Eroton reported as much as 15,000-b/d difference between oil produced and oil delivered on NCTL. The FSO is also expected to improve overall well uptime.
ELI Akaso’s conversion was completed as of September 2019, with its lease automatic custody transfer unit fitted in Malaysia.
OML 18 lies in eastern Niger Delta south of Port Harcourt in onshore swamp terrain and hosts 11 oil and gas fields, eight of which have been developed and six of which are producing. Eroton runs seven oil pump stations and one non-associated gas and three associated gas gathering systems in OML 18. Capacities range from 10,000 to 60,000 b/d and 120-150 MMcfd.
The investment comprises a 10% equity interest in ELI together with a $15 million shareholder loan at 14%/year for 4 years, and repayable quarterly following a 1-year moratorium from the date of investment. Funds will be provided to ELI in two tranches with the first $10 million tranche being made by San Leon the first week in August. The second tranche of $5 million is expected to be made fourth-quarter 2020.
ELI, through its Nigerian subsidiary, will earn fees for transporting and storing crude from OML 18 and potential third parties.
Christopher E. Smith | Editor in Chief
Chris brings 32 years of experience in a variety of oil and gas industry analysis and reporting roles to his work as Editor-in-Chief, specializing for the last 20 of them in midstream and transportation sectors.