The Nigerian National Petroleum Company (NNPC) Ltd. has inked a gas supply agreement with Indorama Eleme Petrochemicals Limited, which will add $3 billion to the country’s economy annually, according to a press release by the company.
The Memorandum of Understanding was signed to promote the use of natural gas by large-scale gas utilisation companies and contribute a lifetime contribution of $18 billion to government revenue, according to the state-owned oil corporation.
The agreement is to explore and develop suitable opportunities within the scope of both parties’ interests across the Nigerian hydrocarbon value chain; a development that Mele Kyari, the Company’s GCEO, summarized as “NNPC Limited is on the threshold of making value out of gas beyond any imagination.”
“This role is in alignment with Nigeria’s Nigasification strategy which is a consolidation of critical programs embarked upon by the company to utilise natural gas and its associated liquids to be the energy source of choice, spur economic growth, free up crude oil for exports, and ultimately enable job creation.”
According to the GCEO, with this project, “we are seeing an annual contribution of $3bn to the nation’s GDP and a lifetime contribution of $18bn to government revenue.”
As part of the company’s vision of operating Africa’s largest Petrochemical Hub, Indorama, which owns the world’s largest single-train Urea Plant in Port Harcourt, Nigeria, is currently working on expansion plans in the gas-based heavy manufacturing industries such as fertiliser, methanol, and petrochemicals over the next six years.
“As the national energy company, one of NNPC Ltd.’s roles as enshrined in article 64(i) of the Petroleum Industry Act (PIA) is to promote the use of natural gas through the development and operation of large-scale gas utilisation industries,” the statement signed by Garba Deen Muhammad, Chief Corporate Communications Officer of the NNPC Ltd., read.
In his remarks, Manish Mundra, the MD/CEO of Africa Indorama Energy, said, “This is a strategic collaboration to unlock Nigeria’s upstream sector, but more importantly, to partner downstream, to share the value chain.”
He said, “Nigeria’s gas reserves should position the country as one of the largest urea producers in the western hemisphere.”
According to him, the key benefits of the opportunities include the monetisation of over 1.7 trillion cubit feet (Tcf) of gas and 100 million barrels of oil reserves, generation of upstream lifecycle revenue of over $18 billion, downstream production of about 4.8 Million Tonnes Per Annum (MTPA) of products including methanol, urea, and fertiliser to boost national food security.
“Other benefits include the creation of about 55,000 direct and indirect employment opportunities, the development of a condensate refinery to boost petroleum product supply and reduce product importation, annual GDP contribution of over $3.8 billion, and attraction of over $7 billion of foreign direct investment into the country.”
According to the statement, the NNPC Ltd. MOU agreement with Indorama follows Nigeria’s President Bola Ahmed Tinubu’s commitment in India a few weeks ago, to strengthen business relations between both countries.