NNPC, Indorama sign $7 Billion gas supply agreement
The Nigerian National Petroleum Company (NNPC) Ltd. has entered into a historic $7 billion gas supply Memorandum of Understanding with Indorama Eleme Petrochemicals Limited, solidifying their commitment to advancing the utilization of natural gas by large-scale industries.
Nigeria is currently in the midst of a decade-long gas policy initiative, with the goal of leveraging its substantial 209 trillion cubic feet of gas reserves to power its economy. However, several challenges, notably issues related to security and infrastructure, continue to impede progress.
Speaking at the signing ceremony in Abuja, the Group Chief Executive Officer of NNPC, Mele Kyari,, expressed unwavering determination to make this project a reality.
He emphasized the importance of tapping into the country’s dormant gas resources, citing the global recognition of gas as a crucial transitional fuel.
Kyari highlighted that over 80 percent of Nigeria’s power plants rely on gas, underscoring the need to ensure a stable gas supply to sustain industrial activities and create jobs. The partnership with Indorama represents a pivotal step towards harnessing the country’s gas resources.
Kyari said the collaboration would not only unlock upstream assets for gas production but also establish essential infrastructure for industries, including Urea and fertilizer production. Kyari mentioned a significant investment of at least $7 billion in this project, which he believes will pave the way for expanded cooperation.
The Managing Director of Indorama, Manish Mundra, expressed enthusiasm about the partnership, asserting that it would reshape the dynamics of their relationship with NNPC, which has spanned over 16 years.
Mundra stressed the importance of downstream collaboration, emphasizing Nigeria’s potential to become a major producer of Urea and methanol on a global scale.
He mentioned plans for investment in additional fertilizer lines, two Methanol production lines, and a substantial petrochemical project.
Chief Upstream Investment Officer of NNPC Upstream Investment Management Services (NUIMS), Bala Wunti, revealed that the deal came together in just three weeks, starting with Kyari’s directive to engage Indorama and explore opportunities for robust gas delivery.
As part of the agreement, 800 million cubic feet of gas will be made available for domestic use, marking a significant step towards harnessing Nigeria’s vast gas resources.
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