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Tuesday, September 27, 2022

NNPC, Dangote, sign gas supply deal to increase local production of fertiliser

The Nigerian National Petroleum Company (NNPC) Limited says it sealed an agreement to supply gas to Dangote Industries Limited.

According to NNPC, the Gas Supply and Aggregation Agreement (GSAA) was sealed in Abuja on the sidelines of the ongoing fifth Nigeria International Energy Summit (NIES 2022) yesterday.

NNPC said the deal is with its partners in the Shell Petroleum Devt Company (SPDC) Joint Venture to supply gas to fertiliser plants of Dangote Group.

The parties to the agreement include NNPC, Shell Petroleum Development Company (SPDC), TotalEnergies, with the Gas Aggregation Company of Nigeria (GACN) as the gas aggregator.

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“The deal will ensure the monetisation of over 70MMSCFD gas volumes from Tunu Central Processing Facility (CPF) in the NNPC-SPDC JV to Dangote Industries Ltd, thereby increasing local production of fertiliser in the country,” NNPC said in a statement.

Speaking on the deal, Mele Kyari, group managing director, NNPC, said it was part of the drive to deepen gas utilisation.

He said the supply of gas to phase two of the Dangote plant would increase domestic production.

“But more importantly, it is a platform that will increase local production of fertiliser in our country,” he added.

“As you may be aware, it is the 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.”

In his remarks, Aliko Dangote, chairman of Dangote Group, said the new gas supply deal would enable his company to rake in at least $1.8 billion in terms of export earnings.

“Apart from Egypt, no other African country now has our capacity. We will meet the domestic market, and then we will be able to export at least $1.8 billion in terms of foreign exchange coming into the country,” he said.

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