NNPC, Dangote sign 10-year gas supply deal to boost domestic production

The NNPC Gas Marketing Limited (NGML), a subsidiary of the Nigerian National Petroleum Company (NNPC) Limited, has executed a Gas Sale and Purchase Agreement (GSPA) with Dangote Petroleum Refinery and Petrochemicals FZE, marking a substantial step towards bolstering Nigeria’s industrial capabilities.

According to a statement on Wednesday by the Chief Corporate Communications Officer of NNPC, Olufemi Soneye, the deal was agreed upon at Dangote Group’s corporate headquarters in Falomo, Lagos.

Signed by the Managing Director, NGML, Justin Ezeala and the President/CEO of the Dangote Group, Aliko Dangote, it outlines the supply of natural gas for power generation and feedstock at the Dangote Refinery, in Ibeju-Lekki, Lagos State.

The statement said the agreement outlines the supply of 100 million standard cubic feet per day (MMSCF/D) of natural gas to support power generation and serve as feedstock for the refinery located in Ibeju-Lekki, Lagos State.

Under the terms of the agreement, NGML will provide a firm daily supply of 50MMSCF/D, with an additional 50MMSCF/D as interruptible gas, over an initial 10-year period, with options for renewal.

This deal underscores a commitment to enhancing Nigeria’s domestic gas utilisation, aligning with the policies set forth by President Bola Ahmed Tinubu to leverage the nation’s extensive gas reserves to fuel industrial growth and economic development.

“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.

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“Under the terms of the agreement, NGML will supply 100 million standard cubic feet per day (MMSCF/D), 50MMSCF/D being firm supply and the rest 50MMSCF/D interruptible natural gas supply to the refinery for an initial period of 10 years, with options for renewal and growth.

“This collaboration is a significant step toward ensuring the operational success of the Dangote Refinery and enhancing Nigeria’s domestic gas utilization. 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 statement said.