Oando Gas & Power recently rebranded and changed its name to Axxela. Bolaji Osunsanya, Chief Executive Officer of Axxela, in this interview talks to Frank Uzuegbunam, Editor, West Africa Energy, about the new brand, new projects and new growth areas for the company amongst other issues. Excerpts:
What necessitated the change of name from Oando Gas & Power to Axxela?
We have had reasons to change our name. It will be nice to give background on why that is necessary. Sometime last year, we announced that we have new investors in Oando Gas & Power. The new investors, Helios Capital Partner, is even bigger than Oando Plc.
We thought it is necessary to change the name to reflect this new shareholding. They are a big Africa-based infrastructure fund. They have about $3 billion in assets under investments. They are the same owners of Helios Towers, ARM Pensions, Vivo – the Shell Africa assets and they are also the same partners in OVH – Oando Marketing. They have quite some experience doing infrastructure business in Sub-Saharan Africa.
The premise of their coming into Oando Gas & Power is that they liked our history as a gas and power infrastructure business and they thought that coming in and putting in necessary capital will help us achieve growth. It’s a growth model. That is their business case for coming in. Our own way of looking at this change is to leverage on the two strengths – Oando, on one hand, has good market access, Oando, on the other hand, is a very formidable local content platform and more importantly, Oando gives us access to gas resources. Oando is member of joint ventures and we can get gas molecules from them and they also allow us access to all their other corporates. Helios on the other hand brings a lot of capital and they bring a wealth of management experience running growth companies in Africa.
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We have already seen the benefits of this marriage in the last 9 months. We have better access to capital and debt market and Oando is also of great help in terms of access to gas resources.
Do you think the new brand, Axxela, will loose any brand equity as a result of the change?
No, I do not think so. If anything, we see the positives of bringing the 2 to our advantage. We see the benefits of retaining the legacies of Oando and at the same time bringing forward the strong positions of Helios. We also see that our distinct brands will also give us access to things that our parentage constrained us. For instance, in our distinct brands, we can approach the banks as first-time borrowers and create our own room for ourselves. Those are the premises under which we thought it was appropriate we should rebrand. As I said, the idea was not to shake off any of the benefits, we want to take the benefits and create even more room for ourselves – that is why Axxela has come to be. Axxela is a coinage of acceleration and excellence with Oando Gas and Power as the forerunner with this renewed strength.
What growth areas are you targeting?
First is to maximize the existing assets. As you know, we have Gaslink, Central Horizon Gas – the distribution business in Port Harcourt and we have GNSL which is the CNG business out of Lagos.
They want us to maximize these platforms so they are giving us capital to de-bottleneck whatever constraints we have in each of these companies hence they have given us money to complete phase 4 of the pipeline in Gaslink. We have completed Ijora to Bonny Camp; we will go on to the subsequent segments later. In Port Harcourt, from Trans-Amadi, we are laying 8.5km pipeline all the way to the port area. Our foundation customer there is BUA Sugar refinery and it will open up all that area to gas. In CNG, they are giving us money to overhaul the fleets and make sure we can deliver 20 skids of trucks a day from that facility.
They are helping us to maximize the business but more importantly, they are giving us the impetus to go into new areas.
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What are these new areas?
The first area we are going into is the regional market. We think we are well-placed to do what we have done in Lagos in most of the West African countries. We have therefore set up businesses in those countries. In the last 3 months, we got our Shipper’s license to be able to ship gas along the west coast so the West African Pipeline Authority (WAPA) has given us a shipper’s license to be able to do that going forward. We are looking at Benin, Togo and Ghana markets to see what else is possible there. In a short term, we want to get to 100mscfd quickly. Subsequently, we see how it goes. It has a big potential to grow because they don’t have many other sources as we have in Nigeria.
The second one will be in our virtual pipeline businesses. We are far gone with the Ajaokuta mini-LNG project – that should approach FID soon. We are optimistic that by end of 2018, we will have the mini-LNG in place. The mini-LNG development is in conjunction with Nigerian Gas Marketing Company and together, we are putting a 200mscfd gas plant in Ajaokuta.
The third area will now be to look at gas infrastructure; we are trying to build some gas processing plants and modular processing plants for those who may require some services. Today, we are gathering clients who may require those services so we can scope the business.
The last part is the trading business where we want to be able to aggregate demand and supply of gas from different markets and making it happen seamlessly. We are trying to create flexibility for buyers of gas such that the traditional practice that you must buy gas for 20 years in a fixed contract will be less of a burden, making it an easier transaction. Those are the 4 new critical areas we are working on to establish growth. It is our idea that we will grow exponentially and we will make a significant return to our investors in the medium term.
READ ALSO: Oando explains delay in FY ’19 & Q1 2020 result as SEC face-off lingers
How do you source natural gas?
Our source of gas is varied and we will continue to work with all manner of suppliers to get gas. In the past, we were tied to the aprons of the Nigerian Gas Company now Nigerian Gas Marketing Company but in the last 2 years, the board has insisted that we must diversify our supply sources so we are talking to more suppliers, producers to see what we can get in that regards and that consultation is far and wide. We are talking to anybody who has an acreage that has gas
They have also given us approval to explore other sources of gas into Nigeria – the FSRU program – trying to get LNG into Nigeria and trying to get LNG into other parts of West Africa is progressing.
Do you see any linkage with what you are trying to do and the new National Gas Policy?
We see many linkages with the Gas Policy; the Gas Policy speaks largely to the constraints we had in the past. The Gas Policy allows a lot more private sector participation. Gas Policy talks about the development of mission-critical infrastructure. The Gas Policy talks about bankability for all commercial projects in gas. This for us is good for our business going forward and what we are trying to do is to align with the policy and do things quickly. The Gas Policy talks about flare out and monetization – those are natural areas, it is the reason we are going into processing, it is the reason we are opening up new regional markets so that when you monetize the gas, you have ready markets to take the molecules rather than wait. We are working in tandem with that policy.
