NNPC, Dangote seal 10 years gas supply deal

The Nigerian National Petroleum Company (NNPC) Limited through its subsidiary, NNPC Gas Marketing Limited (NGML) has signed a Gas Sale and Purchase Agreement (GSPA) with Dangote Petroleum Refinery and Petrochemicals FZE.

The company, in a statement on Wednesday said the deal would see NGML supplying 100 million standard cubic feet of natural gas per day (MMSCF/D) to the Dangote Refinery in Ibeju-Lekki, Lagos, for an initial period of 10 years.

Spokesman of the company, Olufemi Soneye, said the agreement was signed on Tuesday at Dangote’s Corporate Head Office in Lagos by NGML’s Managing Director, Justin Ezeala, and Aliko Dangote, President and CEO of Dangote Group.

He noted that the collaboration aims to provide a stable supply of natural gas to the Dangote Refinery, ensuring reliable power generation and feedstock supply, thereby advancing Nigeria’s local production capacity and industrial growth.

“This partnership is a major step toward actualizing President Bola Ahmed Tinubu’s vision of leveraging Nigeria’s vast gas resources to drive industrial growth and economic prosperity. The agreement marks a significant milestone for both parties and highlights NGML’s commitment to delivering strategic gas projects across the country to enhance Nigeria’s energy security,” Ezeala said at the signing.

Under the terms of the GSPA, NGML would deliver a firm supply of 50 MMSCF/D of natural gas, with an additional 50 MMSCF/D provided on an interruptible basis, meeting the refinery’s high demands as it prepares to reach full operational capacity.

The arrangement is noteworthy for its zero capital expenditure (CAPEX) outlay, a first for NGML or any local gas distribution company in Nigeria, making the deal a historic milestone, the statement added.

The Dangote Refinery, one of the largest refineries in Africa, is expected to play a critical role in reducing Nigeria’s dependence on imported fuel products, and the steady supply of natural gas from NNPC Ltd will be key to achieving this. The deal underscores both entities’ commitment to boosting Nigeria’s domestic gas utilization and supporting industrial and economic growth.

Dangote said the partnership is essential to Nigeria’s long-term energy security, adding that by sourcing energy needs locally, “we are contributing to the country’s economic resilience and fostering the growth of Nigeria’s industrial sector.”