The Nigerian National Petroleum Corporation Limited (NNPC Ltd) announced on Wednesday that one of its subsidiaries has entered into an agreement to supply 100 million standard cubic feet of gas per day to the Dangote oil refinery for a period of 10 years.
The financial terms of the agreement were not disclosed.
Under the terms of the agreement, NNPC Gas Marketing Limited will provide the refinery, owned by Nigerian billionaire Aliko Dangote and located in Lagos, with natural gas for power generation and as a feedstock. The contract includes options for renewal and additional supply.
The agreement was executed on Tuesday at the Corporate Head Office of Dangote in Falomo, Lagos State, by Mr. Justin Ezeala, Managing Director of NGML, and Aliko Dangote, President and CEO of Dangote Group.
In a statement, Mr. Olufemi Soneye, Chief Corporate Communications Officer of NNPC Ltd., indicated that the agreement details the provision of natural gas for power generation and as feedstock for the Dangote Refinery located in Ibeju-Lekki, Lagos State.
Soneye emphasized that this achievement aligns with President Bola Tinubu’s initiative to leverage Nigeria’s rich gas resources to enhance the country’s industrial development and stimulate economic growth.
This initiative, characterized by a substantial investment without any Capital Expenditure (CAPEX) commitment, has been regarded by many as a groundbreaking event in the history of NGML and any gas Local Distribution Company (LDC) in the nation.
According to the agreement, NGML is set to provide 100 million standard MMSCF/D, which includes 50 MMSCF/D as firm supply and an additional 50 MMSCF/D as interruptible natural gas supply to the refinery for an initial term of 10 years, with options for renewal and expansion.
This partnership marks a crucial advancement in ensuring the operational efficiency of the Dangote Refinery and improving the utilization of domestic gas in Nigeria.
NNPC Ltd, through its gas marketing subsidiary NGML, remains at the forefront of initiatives aimed at promoting the use of domestic gas to bolster industries and businesses across the country.
The agreement, he stated, marks a significant achievement for both NNPC Ltd. and Dangote Refinery, reflecting their mutual dedication to enhancing local production and delivering essential products for the welfare of all Nigerians.
He further emphasized that this serves as additional evidence of NGML’s steadfast commitment to business excellence and the fulfillment of NNPC Ltd.’s primary objective of ensuring energy security by implementing strategic gas projects nationwide.
NNPC, as Africa’s largest oil producer, is actively promoting domestic gas consumption to foster industrial growth and development.