Published on 20 May 2022

Japanese conglomerate takes 25% stake in Nigerian gas firm

The Sojitz-Axxela deal could pave the way for more Asian investments in African oil and gas

Close up of industrial equipment with gas monometer

Japan’s Sojitz Corporation (Sojitz) has reached a deal with Helios Investment Partners (Helios) to secure a 25% equity stake in Axxela, a Nigerian-headquarter energy infrastructure firm which primarily specialises in gas distribution in West Africa. This is Sojitz’s first major foray into the African energy sector and makes it the first Japanese company to enter the gas retail business in Nigeria. More importantly, this deal could potentially mark the start of a wider engagement on the continent as the Tokyo-based conglomerate pursues high-growth markets and opportunities.

Sojitz and Helios released a joint statement announcing the deal on 31 March. Under the terms of the agreement, Sojitz would gain a 25% equity stake and Helios would retain 75%. No details pertaining to the financing of the agreement have yet been released. However, in 2019 Oando sold its final 25% stake in Axxela to Helios for US$41.5m. At that time, Axxela was valued at US$166m.

Axxela is one of the leading gas distribution companies in West Africa. The company was founded in 2001 as Oando Gas and Power Limited, a subsidiary of Oando PLC. The company was rebranded as Axxela in 2017, not long after Helios acquired a majority stake in 2016. Axxela is comprised of four companies: Gaslink Nigeria Limited (GNL), Central Horizon Gas Company (CHGC), Gas Network Services Limited (GNSL), and Transit Gas Nigeria Limited (TGNL). Through these four entities, Axxela offers a variety of gas distribution services. The company has a distribution network infrastructure which extends over 300kms as well as agreements with the 678kms West African Gas Pipeline (WAGP) through which Axxela provides 15 million standard cubic feet (scf) of gas to Togo. In total, Axxela provides over 80 million scf of gas per day to a network of over 175 industrial and commercial customers which include major Nigerian entities such as Nigerian Breweries Plc., Chi Ltd., Dangote Sugar, Flour Mills of Nigeria Plc., BUA Group, PZ Cussons, and Nigerian Bottling Company.

Axxela is an established player in the Nigerian energy sector and is open about its ambitions to expand across West Africa and even into other African markets. These growth ambitions are likely a major motivator for the deal with Sojitz. The Japanese corporation has successfully developed a downstream gas business in Vietnam and has experience in operating in multiple sectors while meeting increasingly stringent global sustainability requirements such as CO2 reduction. Sojitz’s expertise will enhance Axxela’s growth potential and enable the Nigerian company’s ambition to provide multiple energy solutions meeting individual customers’ requirements.

Meanwhile, Sojitz has gained access to a market with strong growth potential where it previously had a negligible presence. Expanding into such markets is part of the company’s Medium-Term Management Plan 2023. The Japanese firm has also commented that it hopes that this investment will open the door to further investment and operations in Africa’s downstream gas market. This has prompted speculation that Sojitz and Helios view the Axxela deal as a blueprint for possible future collaboration. Helios has significant stakes in several major gas and energy firms across Africa including the Tema LNG Terminal Company (Ghana), Africa Oil (Kenya, Ethiopia, and Somalia), Eland Oil & Gas (Nigeria), Impact Oil and Gas (Gabon, Guinea-Bissau, Namibia, Senegal, and South Africa), and OVH Energy (Nigeria).

If this deal between Sojitz and Helios is successful it will not only provide a blueprint for the two companies themselves to work together but may also illustrate a path for other Asian companies with a limited African presence to find success in the continent. This will be particularly pertinent for capital-rich Japanese firms seeking new high-growth opportunities and which need to find a means to rapidly compete with their European and Chinese competitors that have a more established presence in African markets.



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Helios Investment Partners and Sojitz Corporation start collaborations in West African gas downstream businesses’, Sojitz, 31 March 2022.

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