News - Oil & Gas - March 3, 2022

Fertiliser Production: NNPC, Shell, others sign gas supply deal with Dangote

By Bassey Udo

The Nigerian National Petroleum Corporation Ltd (NNPC) on Wednesday signed a gas sale-purchase deal with its partners on gas aggregation to boost the local production of fertiliser in the country.

The Gas Aggregation Agreement was signed in Abuja between Dangote Fertiliser Limited, a subsidiary of the Dangote Group, with Shell Petroleum Development Company (SPDC), Nigeria Agip Oil Company (NAOC/ENI, Gas Aggregation Company of Nigeria (GACN), and TotalEnergies.

The deal, which would facilitate the execution of the second phase of the expansion of the Dangote fertiliser plant, was
sealed 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/CEO of NNPC, Mele Kyari, said at the signing ceremony that the deal was part of the Company’s drive to ensure greater utilisation of Nigeria’s abundant gas resources, by monetizing the reserves in the form of liquefied natural gas for industrialization.

Kyari said the signing of the aggregation deal followed the progress achieved in its engagement with the Dangote Group for the SPDC joint venture, comprising of NNPC, Shell, NAOC/ENI and TotalEnergies to deliver 70 million standard cubic meters of gas to phase two of the Dangote fertiliser plant.

This, he said, would no doubt increase the volume gas supply to the domestic market and to increase the capacity for local production of fertiliser in Nigeria.

“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 percent of all domestic production of fertiliser in the country. And we are happy to sign the Gas Supply Agreement with them to encourage them to do more,” Kyari said.

The Chairman, Shell Companies in Nigeria, Osagie Okunbor, expressed delight over the deal and thanked the joint venture team that worked extremely hard to see to the signing of the gas sale aggregation agreement.

“It is a huge achievement for the country, because already Dangote Group produces the bulk of the fertiliser used in the country. We know how important the subject of agriculture is for the country, not just for energy security, but also food security.

“This is why all of us on the SPDC JV led by the NNPC, are pleased to be able to execute this agreement,” he said.

Responding, the Chairman of Dangote Group, Aliko Dangote, thanked the NNPC GMD for his leadership in actualising the signing of the agreement.

Dangote said the additional gas intake from the deal would bring in about $1.8billion revenue in foreign exchange into the country in view of the energy crisis.

Besides, the gas supply would boost the country’s fertilizer production capacity to one of the largest producers in Africa.

“Apart from Egypt, no other African country will have the capacity to produce fertiliser as much as Nigeria. When the current capacity of the plant is expanded, it would not only meet with the demand in the domestic market, it would export and generate at least $1.8 billion in terms of foreign exchange coming into the country. (NAN)

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