By Hosea Parah, Abuja

The Nigerian National Petroleum Corporation Limited (NNPC Ltd) has entered into a major Gas Sale and Purchase Agreement (GSPA) with Dangote Petroleum Refinery and Petrochemicals FZE. The agreement, signed by Barr. Justin Ezeala, Managing Director of NNPC Gas Marketing Limited (NGML), and Aliko Dangote, President/CEO of the Dangote Group, was finalized on Tuesday at Dangote’s Corporate Headquarters in Falomo, Lagos State.

Under the terms of the deal, NGML, a subsidiary of NNPC Ltd, will supply Dangote Refinery with 100 million standard cubic feet per day (MMSCF/D) of natural gas, crucial for the refinery’s power generation and feedstock needs. The supply will consist of 50 MMSCF/D of firm supply and another 50 MMSCF/D of interruptible natural gas, over an initial 10-year period with options for renewal.

This landmark agreement is part of President Bola Ahmed Tinubu’s broader vision to harness Nigeria’s vast natural gas resources to fuel industrialization and economic growth. The partnership aims to support the Dangote Refinery, one of the largest in Africa, in becoming a key player in Nigeria’s refining and petrochemical sectors, thereby driving the nation’s industrial and economic progress.

The deal is particularly notable for its lack of capital expenditure (CAPEX) outlay, a rare and unprecedented feature in the history of NGML and other Local Distribution Companies (LDCs) in the country. Analysts view this as a testament to the strength of the collaboration between NNPC Ltd and Dangote Group, which is expected to revitalize the domestic gas market and foster economic growth.

“This agreement marks a pivotal moment for NNPC Ltd, Dangote Refinery, and Nigeria’s energy future,” said Barr. Justin Ezeala. “By supplying natural gas to power the Dangote Refinery, we are not only ensuring its operational success but also supporting the broader goal of advancing Nigeria’s industrialization through the strategic use of our domestic gas resources.”

The Dangote Refinery, located in Ibeju-Lekki, Lagos State, is expected to play a crucial role in reducing Nigeria’s dependence on imported petroleum products. With this new gas supply, the refinery can ensure consistent and reliable energy for its operations, which include refining, petrochemicals production, and power generation.

Aliko Dangote, expressing his satisfaction with the deal, emphasized the importance of domestic resource utilization in advancing Nigeria’s industrial and economic prospects. He also highlighted the role of strategic partnerships in transforming the nation’s energy landscape.

“This agreement will help ensure that the Dangote Refinery operates at full capacity, creating jobs and boosting Nigeria’s energy security,” said Dangote. “We are committed to contributing to the economic development of Nigeria and are confident that this partnership with NNPC Ltd will enhance our ability to serve the Nigerian market and beyond.”

This agreement underscores NNPC Ltd’s ongoing efforts to prioritize domestic gas usage, further solidifying its role in promoting Nigeria’s energy security and industrial growth. With a shared vision of enhancing local production, NNPC Ltd and Dangote Refinery are poised to significantly contribute to Nigeria’s economic prosperity over the next decade and beyond.

The collaboration also highlights the growing importance of strategic gas projects in Nigeria, as NGML continues to lead initiatives to develop the country’s energy infrastructure.