(Ecofin Agency) - Towards focusing on incorporating gas production with its supply business, Oando has voiced out plans to construct a $350 million gas plant in Nigeria.

According to Bolaji Osunsanya (photo), MD of Oando Gas and Power unit, the plant which has a capacity to process 300 Mmscf/d of gas, will take about 2 years to be completed. He estimates the cost of the project which is at its development stage to be between $300 million and $350 million and will be launched in Q1 of 2016.

“We have done transport in the past, we are getting into (gas) processing right now. We are working ourselves up the chain”, Osunsanya told Engineering News.

Oando's gas and power unit from January to September recorded a drop in its net income from $22 million in 2014 to $19 million this year.

The parent company (Oando plc. with interests in oil exploration, terminals and oil trading), had said that it was seeking authorisations to sell its gas and power investment in order to cut debt and raise up to 80 billion naira from investors.

Mr. Osunsanya noted that Nigeria still has the chance to increase gas plants as its current capacity is around 2 billion scf/d. He predicts that Nigeria will need about $55 billion in the next seven years to develop gas infrastructure to feed growing demands. The infrastructure will include constructing new pipelines, processing plants and drilling of new wells.

He valued demand at 5 billion scf/d, in which 3.5 billion would be needed for power and while the rest will be for other uses. On the other hand, half of the 7.5 billion scf/d of gas generated in the country was flared or injected back into the ground as a result of insufficient pipelines for distribution.