Accugas secures N773bn local loan to exit dollar obligations

Accugas Limited, a midstream gas subsidiary of Savannah Energy, has secured an expanded N773 billion local currency facility from a consortium of five Nigerian banks, a step aimed at mitigating its exposure to foreign exchange volatility.

The new agreement, expected to be signed in June 2025, will see Accugas fully refinance its remaining US dollar debt, marking a deliberate shift in its funding strategy, the company stated.

This follows an earlier N340 billion “Transitional Facility” secured by Accugas in January 2024, from the same group of five local banks.

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According to the Accugas, the company planned to use the proceeds to repay the outstanding balance of approximately $212.3 million on its existing US dollar facility, with full repayment targeted for the second half of 2025.

The company stated: “N340 billion term facility signed by Accugas in January 2024 with a consortium of five Nigerian banks (the “Transitional Facility”).

“As at 31 December 2024, N332 billion of the Transitional Facility had been drawn down, with the resulting funds converted to US$, which, along with cash held, was used to partially prepay the existing Accugas US$ Facility, leaving a balance as at 31 December 2024 of approximately $212.3 million.”

Accugas focuses on the marketing, processing, distribution and sale of gas to the domestic Nigerian market. In 2022, the company processed and transported an average of 145 million standard cubic feet per day (MMscfpd) of gas through its pipeline network, with all gas sourced from Savannah’s 80 percent indirectly owned Uquo gas field.

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Gas is processed at Accugas’ 200 MMscfpd Uquo central processing facility (Uquo CPF) for onward transportation to customers through its c.260km, up to c.600 MMscfpd transportation capacity pipeline network.

The company announced that the final documentation has been agreed upon with the lenders regarding an increase in the Transitional Facility from N340 billion to up to N773 billion.

“It is expected that the agreements will be signed this month, and this upsized facility will be utilised to enable the remaining outstanding balance of the Accugas US$ Facility to be repaid.

“It is currently expected that this will be completed in H2 2025 and, once completed, this will align Accugas’ primary debt facility with the currency in which gas revenues are received,” it added.