The Nigerian National Petroleum Company (NNPC) Ltd. has forged a groundbreaking $7 billion gas supply Memorandum of Understanding with Indorama Eleme Petrochemicals Limited, cementing their commitment to advancing the utilization of natural gas by large-scale industries.
Nigeria is presently amidst a decade-long gas policy initiative, aimed at leveraging its substantial 209 trillion cubic feet of gas reserves to fuel its economy. However, numerous challenges, including security and infrastructure issues, continue to hinder progress.
During the signing ceremony in Abuja, Mele Kyari, the Group Chief Executive Officer of NNPC, voiced resolute determination to bring this project to fruition. He underscored the significance of tapping into the country’s untapped gas resources, highlighting the global recognition of gas as a vital transitional fuel.
Kyari emphasized that over 80 percent of Nigeria’s power plants rely on gas, underscoring the need for a reliable gas supply to sustain industrial activities and create jobs. The partnership with Indorama marks a pivotal stride toward harnessing the country’s gas reserves.
Kyari mentioned that this collaboration would not only unlock upstream assets for gas production but also establish critical infrastructure for industries, including Urea and fertilizer production. He mentioned a substantial investment of at least $7 billion in this project, which he believes will pave the way for expanded cooperation.
Manish Mundra, the Managing Director of Indorama, expressed enthusiasm about the partnership, asserting that it would reshape the dynamics of their 16-year-long relationship with NNPC. Mundra stressed the importance of downstream collaboration, highlighting Nigeria’s potential to become a major global producer of Urea and methanol.
He mentioned plans for investments in additional fertilizer lines, two Methanol production lines, and a substantial petrochemical project.
Bala Wunti, the Chief Upstream Investment Officer of NNPC Upstream Investment Management Services (NUIMS), disclosed that the deal materialized in just three weeks, initiated by 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 milestone in harnessing Nigeria’s abundant gas resources.