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AfrOil PIPELINES & TRANSPORT AfrOil

San Leon Energy acquires 10%

of ACOES oil pipeline operator

NIGERIA IRELAND’S San Leon Energy has taken a 10% disruptions related to the use of NCTL, a 97-km
stake in Malta-based Energy Link Infrastructure pipeline that passes through the Niger River
(ELI), the owner of an oil pipeline network now Delta. The pipeline typically carries 150,000-
under construction in Nigeria. 200,000 bpd of crude oil to a terminal facility
In a statement, San Leon said it had arranged on Bonny Island, but it is frequently targeted by
to pay $15mn for an equity stake in the Alter- vandals and thieves and was taken offline several
native Crude Oil Evacuation System (ACOES), times last year.
which will serve as a dedicated transport route San Leon described ACOES as a safer route
for production from OML 18. This licence area for production from OML 18. The new system
lies mostly onshore south of Port Harcourt. It will have “a significant effect on the operation
contains multiple oilfields and is operated by of OML 18, primarily through the reduction of
Nigeria’s Eroton Exploration & Production. downtime and losses associated with the exist-
According to the statement, San Leon’s pay- ing export route,” it said in the statement.
ment will come in the form of a $15mn share- ACOES will charge fees comparable to the
holder loan carrying a coupon of 14% per year cost of pumping crude through NCTL, it added.
over a period of four years. Following a one-year The company also called the deal with ELI
grace period that will begin on the date of invest- a potential source of profit in the medium
ment, ELI will have to make payments on the and long term. It explained that its 10% stake
loan on a quarterly basis. would entitle it to a portion of the fees that “ELI,
San Leon will disburse the funds in two through its Nigerian subsidiary, will earn … for
tranches and is due to release the first tranche of transporting and storing crude oil from OML 18
$10mn before the end of this week. It will then and potential third parties.”
make the second tranche of $5mn available in Oisin Fanning, San Leon’s CEO, expressed
the fourth quarter of 2020, once Midwestern satisfaction with the acquisition. “We are
Leon Petroleum, another Nigerian company, delighted to make this investment, which is in
makes its next scheduled payment on loan notes. line with our strategy of investing in assets with
When finished, ACOES will consist of a near-term cash flow, where the initial invest-
pipeline with a throughput capacity of 100,000 ment is considered to be of limited risk and
barrels per day (bpd) and a floating storage and where there is material upside,” he said. “The
off-loading (FSO) vessel that can hold 2mn bar- ACOES [network] is expected to generate regu-
rels of crude. It will serve as an alternative to the lar cash flow once commissioned in the coming
existing Nembe Creek Trunk Line (NCTL) and quarters, whilst also providing the significant
will only handle oil from OML 18 fields. benefits to downtime and losses reduction for
The network will allow its users to avoid OML 18.” ™

ACOES will only handle oil from OML 18 (Image: San Leon Energy)

Week 31 05•August•2020 www. NEWSBASE .com P11