The Nigerian National Petroleum Company Limited (NNPC Ltd), through its subsidiary NNPC Gas Marketing Limited (NGML), has secured a landmark Gas Sale and Purchase Agreement (GSPA) with the Dangote Petroleum Refinery and Petrochemicals FZE. This agreement, signed in Abuja on Tuesday by NGML’s Managing Director, Barrister Justin Ezeala, and the President and CEO of Dangote Group, Aliko Dangote, sets the framework for a significant supply of natural gas from NNPC Ltd to the Dangote Refinery in Ibeju-Lekki, Lagos.
The agreement marks a major step towards leveraging Nigeria’s abundant natural gas resources to drive industrial and economic growth. According to NNPC Ltd’s Chief Corporate Communications Officer, Olufemi O Soneye, this 10-year deal aligns with President Bola Ahmed Tinubu’s vision of transforming Nigeria’s industrial landscape by harnessing domestic energy resources to stimulate economic activities across various sectors.
Key Terms of the Agreement
Under the GSPA, NGML commits to supplying 100 million standard cubic feet per day (MMSCF/D) of natural gas to the Dangote Refinery. This includes a firm daily supply of 50 MMSCF, with an additional 50 MMSCF as an interruptible supply. This arrangement, structured without any initial capital expenditure (CAPEX) requirement, sets a benchmark in the domestic gas distribution sector and is considered unprecedented for any Nigerian gas Local Distribution Company (LDC). The agreement also provides options for renewal and expansion, reinforcing both entities’ dedication to long-term collaboration.
Boosting Domestic Gas Utilisation
The Dangote Refinery, one of the largest industrial projects in Nigeria, will use the natural gas for both power generation and as a feedstock in its refining operations. This deal underscores NGML’s commitment to ensuring Nigeria’s energy security by prioritising the supply of domestic gas to support local industries. Through this collaboration, NNPC Ltd continues to lead efforts in strengthening Nigeria’s domestic gas market, aligning with the government’s ‘Decade of Gas’ initiative aimed at positioning Nigeria as a global player in natural gas production and utilisation.
Strategic Implications for Nigeria’s Economy
This agreement is seen as a catalyst for Nigeria’s economic revitalisation. By bolstering the operations of the Dangote Refinery, the deal will support increased local production of refined petroleum products, reducing Nigeria’s dependency on imports and supporting foreign exchange stability. The partnership also underscores a joint commitment to industrial expansion and job creation, enhancing Nigeria’s capacity to meet its energy demands domestically.
Commitment to Business Excellence
The GSPA reflects NGML’s dedication to operational excellence and underscores NNPC Ltd’s mission of ensuring Nigeria’s energy security. The company has consistently prioritised strategic gas projects that foster industrial growth and support Nigeria’s aspiration to become an industrialised economy.
This partnership, which aligns the missions of NNPC Ltd and Dangote Group, is expected to serve as a blueprint for future collaborations in Nigeria’s oil and gas sector, promoting sustainable development and national economic growth.
