…Ten-Year Deal to Boost Local Production, Revamp Industrial Growth
The NNPC Gas Marketing Limited (NGML), a subsidiary of the Nigerian National Petroleum Company (NNPC) Limited, has successfully executed a Gas Sale and Purchase Agreement (GSPA) with Dangote Petroleum Refinery and Petrochemicals FZE.
The agreement, signed by the Managing Director, NGML, Barr. Justin Ezeala and the President/CEO of the Dangote Group, Aliko Dangote on Tuesday at the Corporate Head Office of Dangote in Falomo, Lagos State, outlines the supply of natural gas for power generation and feedstock at the Dangote Refinery, in Ibeju-Lekki, Lagos State.
This major milestone is in line with President Bola Ahmed Tinubu’s policy of utilizing Nigeria’s abundant gas resources towards revamping the nation’s industrial growth and kickstarting its economic prosperity.
This development, which sees a huge investment of this nature penned with zero capital expenditure (CAPEX) outlay, has been described by many as unprecedented in the history of NGML or any gas Local Distribution Company (LDC) in the country.
A statement from NNPC stated thatb under the terms of the agreement, NGML will supply 100 million standard cubic feet per day (MMSCF/D), SOMMSCF/D being firm supply and the rest SOMMSCF/D interruptible natural gas supply to the refinery for an initial period of 10 years, with options for renewal and growth.
The NNPC Ltd said the collaboration is a significant step toward ensuring the operational success of the Dangote Refinery and enhancing Nigeria’s domestic gas utilization.
It said, “NNPC Ltd, through NGML, its gas marketing subsidiary, continues to lead efforts in promoting the use of domestic gas to support industries and businesses nationwide.
“The agreement represents a milestone for both NNPC Ltd and Dangote Refinery, aligning with their shared commitment to boosting local production and providing vital products for the benefit of all Nigerians.
“It is also a further proof of NGML’s unwavering commitment to business excellence and fulfilling NNPC Ltd’s core mandate of ensuring Nigeria’s energy security through the execution of strategic gas projects across the country.”
The NNPC Ltd has been leading the charge with substantial investments in gas, significantly impacting the sector’s contribution to the GDP.
Recent statistics underscore the importance of these initiatives in the context of Nigeria’s economic landscape.
In the second quarter of 2023, Nigeria’s oil sector recorded a GDP growth rate of 3.52%, reflecting a recovery from previous downturns.
This growth is attributed not only to crude oil production but increasingly to the expanding natural gas sector. According to the National Bureau of Statistics, the oil and gas sector’s contribution to GDP has seen a marked improvement, with gas output playing a vital role.
Recognizing the strategic importance of gas, NNPC Ltd is shifting its focus from solely oil production to include significant gas investments. With Nigeria possessing over 200 trillion cubic feet of proven natural gas reserves, the potential for growth is immense.
The NNPC Ltd is spearheading the construction of key gas pipelines and processing facilities. The completion of the Ajaokuta–Kaduna–Kano (AKK) gas pipeline is set to enhance the transportation of gas across Nigeria, facilitating greater domestic supply and export capabilities.