The Dangote Refinery’s push to increase its daily production of 650,000 barrels has gained new momentum with the signing of a major gas supply agreement with NNPC Gas Marketing Limited (NGML), a subsidiary of the Nigerian National Petroleum Company (NNPC) Limited. This partnership, formalized in a Gas Sale and Purchase Agreement (GSPA), was signed by Barrister Justin Ezeala, Managing Director of NGML, and Aliko Dangote, President and CEO of the Dangote Group.
Under the agreement, NGML will supply the Dangote Refinery in Ibeju-Lekki, Lagos, with natural gas needed for power generation and as feedstock for production. This deal underscores President Bola Ahmed Tinubu’s policy to leverage Nigeria’s vast gas reserves to stimulate industrial growth and economic development across the country.
The contract’s terms specify that NGML will supply an initial 100 million standard cubic feet of natural gas per day (MMSCF/D) to the refinery. Of this, 50 MMSCF/D will be a firm supply, while the remaining 50 MMSCF/D will be provided on an interruptible basis, meaning it may be adjusted based on supply and demand conditions. This arrangement is set for an initial period of 10 years, with options for renewal and potential expansion.
This agreement is a milestone for NGML, involving no capital expenditure (CAPEX) investment from either party. Such a deal structure is seen as unprecedented in the Nigerian energy market, especially for any Local Distribution Company (LDC) or NGML project. Industry observers have praised this cost-effective structure, viewing it as a smart approach to fostering Nigeria’s domestic gas utilization without substantial upfront investment.
The collaboration is expected to strengthen the operational stability of the Dangote Refinery, providing a reliable energy source that supports its production goals and aligns with broader efforts to expand Nigeria’s industrial sector. NNPC Ltd, through its NGML subsidiary, continues to prioritize the use of domestic gas resources, promoting gas as an energy solution for businesses and industries nationwide.
This strategic partnership also reflects a shared vision between NNPC Ltd and the Dangote Group, reinforcing their commitment to increase local production and deliver essential resources to Nigerians. For NGML, this agreement further exemplifies its dedication to business excellence and fulfilling NNPC Ltd’s mission to ensure Nigeria’s energy security through well-planned, impactful gas projects across the nation.
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