Building Energy Sales Within a Thriving African Economy

VOG has created a gas utility business, GDC, 60% owner and operator of the Logbaba gas project, that manages all gas supply stages from extraction to customer connection. The project has onshore gas reservoirs in Cameroon to provide the industrial region of Douala with cost effective, clean and reliable energy solutions. The Company is focused going forward on a “pure gas” sale model, delivering a consistent cleaner fuel source to a diverse range of markets and applications. GDC has successfully proved first concept of gas conversion to power and is now working with equipment suppliers and potential joint venture partners to provide energy solutions.

Current Products

GDC maximises its gas production through sales across a range of varied uses. With a significant central pipeline network established in Douala, GDC’s engineering team helps design and install necessary conversion systems or power connections for new gas users. Douala city in Cameroon is currently in a period of economic expansion. GDC supports regional economic expansion by ensuring consistent gas supply for thermal and power uses.

Grid Power

Supply of gas to state power operator ENEO’s power stations for the generation of 50MW of electricity to the national grid. Modular generation sets supplied and run through equipment partners Altaaqa Alternative Solutions Projects DWC-LLC (“Altaaqa”). A “pure gas” supply solution within the main Douala network. ENEO have advised GDC of their need to supply 50-80MW of additional power to the Douala grid for each of the next five years.

In addition to ENEO, other grid power suppliers have plans to convert existing power stations to gas from GDC if the supply is available. Consequently GDC is examining expansion plans for the existing gas processing plant and evaluating limits to pipeline capacity. Importantly, it is also planning for reserves expansion in 2016 through its proposed drilling programme.

Thermal

GDC supplies gas to customers for thermal use in boilers, process plants and furnaces. The core customers are those in medium to heavy industry.

Gas condensate

Gas condensate, a by-product of the production of natural gas, is used as a cleaner and solvent, lantern and stove fuel and as a premium product in heavy oil production. Condensate can be taken by road tanker to various parts of the country. 29,700 barrels were produced during the period. Post-period, with significant levels of gas now being supplied to customers, condensate production levels will rise. GDC is examining alternative uses of condensate as with an API gravity of 43, it is close to diesel quality and could command a higher premium.

Retail Power

Gas supplied to dedicated 1.5MW gas-fired electricity generators (“Gensets”) for customers’ factories and plants became a key part in demonstrating the ability of GDC to drive power using gas. This current business is likely to move to a “pure gas” supply.

Future Products

Following a period of significant sales expansion we have realigned our focus on reserves and production expansion. New seismic programmes are being undertaken, with a twin-well campaign aimed at increasing reserves scheduled to begin at the Logbaba gas and condensate project in the first half of 2016. With the purchase of the gas processing plant from Expro, GDC is well positioned to adapt the plant to enable it to potentially double its capacity to approximately 40mmscf/d and supply new product types.

Compressed Natural Gas (“CNG”)

GDC is in discussion with a preferred supplier for the provision of a CNG solution, whereby the supplier will finance and install all gas compression and logistical operations. This model will preserve GDC’s strategy of concentrating on gas sales rather than downstream development. The potential benefits of CNG are:

•Widens our customer radius enabling operations up to 300km from Douala to be provided with our gas;

•High margin business for “pure gas” supply model;

•No capacity pressure on pipeline;

•CNG production can also occur during off-peak periods to help maintain balanced gas production; and

•Minimal GDC capital requirement.

Liquid Petroleum Gas (“LPG”)

Market research and technical studies are being undertaken to establish whether there is a commercial opportunity for GDC to expand into this market.

http://www.victoriaoilandgas.com/gaz-du-cameroun

VOG has created an energy utility business that manages all gas supply stages from extraction to customer connection.
The Company has onshore gas reservoirs in Cameroon to provide the industrial region of Douala with
cost effective, clean and reliable energy solutions.

Gaz du Cameroun: Current Products

GDC looks to maximise its gas production across a range of varied energy product types.
With a significant central pipeline network established in Douala, GDC’s engineering teams help design and install
any necessary conversion systems or power connections for new gas users.

Thermal

Supplying customers gas for thermal use such as in boilers, process plants and furnaces.
The core customers are those in medium to heavy industry and we currently have 23 customers consuming
gas for thermal use.

Gas condensate

Gas condensate, a by-product of the production of natural gas, is used as a cleaner and solvent, lantern and
stove fuel and as a diluent in heavy oil production.
Condensate can be taken by road tanker to various parts of the country.
13,221bbls were produced during the six months to 30 November 2014 (twelve months to 31 May 2014: 14,107bbls).

Gensets (gas-fired electricity generation)

Gas supplied to dedicated 0.5-3.0MW generators for customers’ factories and plants.
We successfully installed the first 6 Gensets at 4 customer sites, resulting in an immediate increase in gas supply.
GDC is looking to expand its gas-to-power business and develop the Genset model, sourcing units meeting specific customer needs.

Gaz du Cameroun: Future Products

The need for GDC gas in Cameroon is driven by high cost fuel sources such as
HFO and a national deficit in power that leads to erratic electricity supply.

GDC is working to develop new markets for its gas such as providing large scale
supply to support the national power provider and through products that need
low levels of infrastructure and capital expenditure, such as compressed
natural gas. The strategy is to develop abroad spectrum of energy product types
and markets.

Supplying the grid

With ENEO and the Cameroon Government, we aim to supply gas to Gensets at power stations in Douala.
We ensure security of supply and have capacity to become the supplier to three power stations in Douala.
Initial planned peak output from the first two of these stations is 50MW.

Compressed natural gas (“CNG”)

We are currently evaluating a CNG project where CNG is transported by road tanker from a compressor station to customers without the capital-intensive requirement of a pipeline. CNG enables gas to be sold economically to businesses via a “virtual pipeline” within a 200km radius of the operations.

Thermal

Supplying customers gas for thermal use such as in boilers, process plants and furnaces. The core customers are those in medium to heavy industry and we currently have 18 customers consuming gas for thermal use.

Gas condensate

Gas condensate, a by-product of the production of natural gas, is used as a cleaner and solvent, lantern and stove fuel and as a diluent in heavy oil production. Condensate can be taken by road tanker to various parts of the country. 14,107bbls were produced during the period.

Gensets (gas-fired electricity generation)

Gas supplied to dedicated 0.5-3.0MW generators for customers’ factories and plants. We successfully installed the first 6 Gensets at 4 customer sites,
resulting in an immediate increase in gas supply. GDC is looking to expand its gas-to-power business and develop the Genset model, sourcing units meeting
specific customer needs.

Gaz du Cameroun: Future Products

The need for GDC gas in Cameroon is driven by high cost fuel sources such as
HFO and a national deficit in power that leads to erratic electricity supply.

GDC is working to develop new markets for its gas such as providing large scale
supply to support the national power provider and through products that need
low levels of infrastructure and capital expenditure, such as compressed
natural gas. The strategy is to develop abroad spectrum of energy product types
and markets.

Supplying the grid

With ENEO and the Cameroon Government, we aim to supply gas to Gensets at power stations in Douala. We ensure security of supply and have capacity to become
the supplier to three power stations in Douala.

Initial planned peak output from the first two of these stations is 50MW.


Compressed natural gas (“CNG”)

We are currently evaluating a CNG project where CNG is transported by road tanker from a compressor station to customers without the capital-intensive
requirement of a pipeline.

CNG enables gas to be sold economically to businesses via a “virtual pipeline”
within a 200km radius of the operations.

http://www.victoriaoilandgas.com/gaz-du-cameroun