NNPC Signs Landmark 10-Year Deal to Supply 100mscf of Gas Daily to Dangote Refinery
By Okafor Joseph Afam | November 14, 2024
In a move set to bolster Nigeria’s gas industry and support industrial growth, the NNPC Gas Marketing Limited (NGML), a subsidiary of the Nigerian National Petroleum Company (NNPC) Limited, has signed a major Gas Sale and Purchase Agreement (GSPA) to supply 100 million standard cubic feet (MMSCF) of gas per day to Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (FZE).
This historic deal, signed at the Dangote Group’s Corporate Head Office in Falomo, Lagos State, marks a collaboration between NGML’s Managing Director Justin Ezeala and Dangote Group’s President and CEO Aliko Dangote. According to Olufemi Soneye, Chief Corporate Communications Officer of NNPC, the agreement underscores Nigeria’s commitment to utilizing its abundant natural gas resources as a driver of industrial growth and economic revitalization, aligning with President Bola Tinubu’s national energy policy.
Under the agreement’s terms, NGML will deliver 100MMSCF of gas per day to the refinery for an initial period of 10 years, with the supply structured as 50MMSCF firm and an additional 50MMSCF as an interruptible supply. This collaboration, which is notable for its zero capital expenditure (CAPEX) outlay, has been described by industry analysts as a groundbreaking venture in Nigeria’s gas distribution landscape.
“This partnership represents a significant step toward enhancing the operational efficiency of the Dangote Refinery while promoting the wider utilization of domestic gas resources,” stated Soneye. “NNPC Ltd, through its NGML subsidiary, remains steadfast in its commitment to supporting industries nationwide by prioritizing domestic gas distribution.”
The deal not only marks a milestone for NNPC and the Dangote Refinery but also aligns with both organizations’ dedication to supporting local production and ensuring energy security for Nigerians. Soneye highlighted that NGML’s collaboration with the Dangote Group is a testament to the company’s dedication to excellence, positioning the deal as a landmark in NGML’s and NNPC Ltd’s strategic initiatives to bolster Nigeria’s industrial sector through targeted energy solutions.
As Nigeria’s largest oil refinery and one of Africa’s major industrial projects, the Dangote Refinery stands to benefit substantially from this steady gas supply, enhancing its capacity for power generation and as feedstock for production, thus supporting Nigeria’s vision of economic prosperity through energy independence and sustainable growth.
