In a groundbreaking move to enhance Nigeria’s industrial capacity and economic prosperity, the Nigerian National Petroleum Company (NNPC) Limited, through its subsidiary NNPC Gas Marketing Limited (NGML), has signed a landmark Gas Sale and Purchase Agreement (GSPA) with Dangote Petroleum Refinery and Petrochemicals FZE. The agreement was formalized on Tuesday, November 13, 2024, at the Dangote Corporate Headquarters in Falomo, Lagos State.
The pact, which underscores the commitment of both parties to bolster local production and industrial growth, will see NGML supplying 100 million standard cubic feet per day (mmscf/d) of natural gas to the state-of-the-art Dangote Refinery in Ibeju-Lekki, Lagos. This supply, comprising 50mmscf/d of firm gas and an additional 50mmscf/d as interruptible supply, is slated for an initial period of 10 years, with options for renewal.
This collaboration marks a significant milestone in President Bola Ahmed Tinubu’s vision of leveraging Nigeria’s vast gas resources to drive industrial transformation and economic growth. Speaking on the agreement, NGML’s Managing Director, Barrister Justin Ezeala, emphasized that the deal represents an unprecedented achievement for both NGML and the broader energy sector in Nigeria.
“This agreement is a testament to NGML’s innovative approach to gas commercialization and demonstrates our commitment to positioning natural gas as the cornerstone of Nigeria’s energy transition and industrial development,” said Ezeala.
Aliko Dangote, the President/CEO of Dangote Group, echoed this sentiment, describing the partnership as a pivotal step toward ensuring the operational success of the Dangote Refinery. The refinery, a mega-project poised to revolutionize Nigeria’s downstream sector, will utilize the gas for power generation and as a feedstock for its petrochemical processes.
The GSPA boasts a zero capital expenditure (CAPEX) framework for NGML, a strategic move hailed as unprecedented in the annals of Nigeria’s gas industry. Analysts have praised the deal for its potential to not only ensure energy supply to the Dangote Refinery but also to catalyze growth across related industries, thereby fostering a ripple effect of economic benefits nationwide.
Under the agreement, NGML will reinforce its leadership in domestic gas utilization, promoting the use of natural gas as a cleaner, more sustainable alternative for powering industries and businesses. The initiative aligns with the NNPC Group’s overarching mandate of ensuring energy security and driving economic advancement through strategic partnerships.
“This partnership exemplifies our shared commitment to bolstering local production, fostering industrial self-sufficiency, and delivering critical products to Nigerians,” noted Olufemi Soneye, Chief Corporate Communications Officer for NNPC Ltd. “It is a bold step forward in ensuring Nigeria’s energy security and creating pathways for sustained economic growth.”
The Dangote Refinery, touted as Africa’s largest private refinery, is expected to significantly reduce Nigeria’s reliance on imported fuels and petrochemicals while creating thousands of jobs and stimulating industrial activities.
With the GSPA in place, the Dangote Refinery is set to benefit from a steady, reliable supply of natural gas over the next decade. The deal underscores NGML’s role as a catalyst for industrial transformation and further consolidates NNPC Ltd.’s reputation as a leader in executing transformative energy projects.
The partnership between NNPC Ltd. and Dangote Group not only aligns with Nigeria’s broader industrialization goals but also reinforces the nation’s position as a key player in the global energy landscape.
Olufemi Soneye
Chief Corporate Communications Officer
NNPC Ltd., Abuja
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