NNPC, Dangote refinery sign 10-year gas supply deal to boost production

The NNPC Gas Marketing Limited (NGML) has signed a gas supply deal with the Dangote Petroleum Refinery and Petrochemicals FZE.

The agreement was signed by Justin Ezeala, the managing director of NGML, and Aliko Dangote, the president and CEO of the Dangote Group, on Tuesday.

The gas sale and purchase agreement (GSPA), signed at the corporate head office of Dangote in Lagos, outlines the supply of natural gas for power generation and feedstock at the refinery.

Under the arrangement, the NGML — a subsidiary of the Nigerian National Petroleum Company (NNPC) Limited — will supply gas of about 100 million standard cubic feet per day (mmscf/d) for 10 years.

In a statement on Wednesday, Olufemi Soneye, the chief corporate communications officer at NNPC, said the milestone conforms with President Bola Tinubu’s policy of utilising Nigeria’s abundant gas resources towards revamping the nation’s industrial growth and kickstarting its economic prosperity.

“This development, which sees a huge investment of this nature penned with zero capital expenditure (CAPEX) outlay, has been described by many as unprecedented in the history of NGML or any gas Local Distribution Company (LDC) in the country,” the statement reads.

“Under the terms of the agreement, NGML will supply 100 million standard cubic feet per day (MMSCF/D), 50MMSCF/D being firm supply and the rest 50MMSCF/D interruptible natural gas supply to the refinery for an initial period of 10 years, with options for renewal and growth.

“This collaboration is a significant step toward ensuring the operational success of the Dangote Refinery and enhancing Nigeria’s domestic gas utilization.

“NNPC Ltd, through NGML, its gas marketing subsidiary, continues to lead efforts in promoting the use of domestic gas to support industries and
businesses nationwide.”

Soneye said the agreement represents a milestone for both companies, aligning with their shared commitment to boosting local production and providing vital products for the benefit of all Nigerians.

He said the deal further proves NGML’s unwavering commitment to business excellence and fulfilling NNPC Ltd’s core mandate of ensuring Nigeria’s energy security through the execution of strategic gas projects across the country.