NNPC, Shell, Dangote, others sign gas supply deal

The Nigerian National Petroleum Company (NNPC) Limited and its partners which include Shell Petroleum Development Company (SPDC), Nigerian Agip Oil Company (NAOC), Total Energies and Gas Aggregation Company of Nigeria (GACN), have signed a Gas Sale and Aggregation Agreement (GSAA), aimed at increasing local production of fertilizer in the country.

The signed deal which could save Nigeria about $1.8 billion in foreign exchange, will see these oil and gas firms supply 70 million standard cubic feet per day of natural gas to Dangote Fertiliser Limited (DFL) to ramp up operations at the plant.

The Gas Aggregation Agreement was signed in Abuja on the sidelines of the ongoing fifth Nigeria International Energy Summit (NIES 2022) with the theme “Revitalising the Industry: Future Fuels and Energy Transition.”

The Group Managing Director of NNPC, Malam Mele Kyari, said during the signing ceremony that the deal was part of its drive to ensure greater utilisation of gas in the country, by way of conversion or monetisation in the form of Liquefied Natural Gas.

Kyari said NNPC had progressed its engagement with Dangote Group for the SPDC joint venture, which comprised of NNPC, Shell, ENI and TotalEnergies to deliver 70 million cubic of gas to phase two Dangote plant, adding that this would no doubt increase gas in the domestic market.

The NNPC boss said, “But more importantly, it is a platform that will increase local production of fertiliser in our country. As you may be aware, it is government’s drive to ensure that we become self-sufficient in the production of fertiliser in the country, and specifically for this year’s zero import of fertilisation in the country. Currently, Dangote group provides about 65 per cent of all domestic production of fertiliser. And we are happy to sign the Gas Supply Agreement with them.’’

Speaking at the event, the Chairman of Dangote Group, Alhaji Aliko Dangote, expressed his appreciation to the Group Managing Director of NNPC for his effort in actualizing the signing of the agreement.

Dangote said that the additional gas would bring in more foreign exchange into the country in view of the energy crisis.

He said apart from Egypt, no other African country had the capacity, adding that it would meet with domestic market and export at least $1.8 billion in terms of foreign exchange coming into the country.

In his remark, Chairman, Shell Company, Mr Osagie Okunbor, thanked the joint team that have worked extremely hard to sign the gas sale aggregation agreement.

He said, “It is huge important to this country because already Dangote produces the bulk of fertiliser and we know how important the subject of agriculture is and for not just energy security, but also food security.”

Nairametrics