San Leon Energy PLC (LON:SLE) said it intends to increase its stake in Energy Link Infrastructure (ELI), the owner of the Alternative Crude Oil Evacuation System (ACOES) project which is being built to connect the OML 18 asset to a floating production storage and offloading (FPSO) vessel.
The company is conditionally investing US$2mln for 1.323% of ELI with an option to invest a further US$6.5 mln for an additional 4.302% stake. San Leon currently holds a 10% interest in ELI, which will rise to 15.625% if the option is exercised in full.
ACOES is due to be commissioned in the second half of 2021 and once online is expected to reduce downtime and reduce pipeline losses which are currently seen in the Nembe Creak Trunk Line route.
"We are delighted to have conditionally agreed to increase our investment in ELI which owns the ACOES project, which we believe will be an important strategic asset that is expected to generate regular cash flow once it is commissioned, whilst also providing significant benefits to downtime and reductions in production losses for OML 18,” said San Leon chief executive Oisin Fanning
“Becoming a more influential shareholder in ELI is consistent with our overall strategy of developing the world class OML 18 asset and building value for our shareholders."