Nigeria’s GDP to get $3bn annual boost from new gas deal
The Nigerian National Petroleum Company (NNPC) Ltd., has signed a gas supply agreement with Indorama Eleme Petrochemicals Limited that will add an annual contribution of $3 billion to the country’s economy, the Company said in a release.
According to the state-owned oil company, the Memorandum of Understanding was signed to promote the use of natural gas by large-scale gas utilisation industries and add a lifetime contribution of $18 billion to government revenue.
The deal is to explore and develop suitable opportunities within the remits of both parties’ interests across the hydrocarbon value chain in Nigeria; a development that Mele Kyari, the GCEO of the Company, summarised thus: “NNPC Limited is on the threshold of making value out of gas beyond any imagination.”
“This role is in alignment with Nigeria’s Nigasification strategy which is a consolidation of critical programs embarked upon by the company to utilise natural gas and its associated liquids to be the energy source of choice, spur economic growth, free up crude oil for exports, and ultimately enable job creation.”
According to the GCEO, with this project, “we are seeing an annual contribution of $3bn to the nation’s GDP and a lifetime contribution of $18bn to government revenue.”
As part of the company’s vision of operating the largest Petrochemical Hub in Africa, Indorama which owns the world’s largest single-train Urea Plant located in Port Harcourt, Nigeria, is currently working on expansion plans within the next 6 years in the gas-based heavy manufacturing industries including fertiliser, methanol, and petrochemicals.
“As the national energy company, one of NNPC Ltd.’s roles as enshrined in article 64(i) of the Petroleum Industry Act (PIA) is to promote the use of natural gas through the development and operation of large-scale gas utilisation industries,” the statement signed by Garba Deen Muhammad, Chief Corporate Communications Officer of the NNPC Ltd., read.
In his remarks, Manish Mundra, the MD/CEO of Africa Indorama Energy, said, “This is a strategic collaboration to unlock Nigeria’s upstream sector, but more importantly, to partner downstream, to share the value chain.”
He said, “Nigeria’s gas reserves should position the country as one of the largest urea producers in the western hemisphere.”
According to him, the key benefits of the opportunities include the monetisation of over 1.7 trillion cubit feet (Tcf) of gas and 100 million barrels of oil reserves, generation of upstream lifecycle revenue of over $18 billion, downstream production of about 4.8 Million Tonnes Per Annum (MTPA) of products including methanol, urea, and fertiliser to boost national food security.
“Other benefits include the creation of about 55,000 direct and indirect employment opportunities, the development of a condensate refinery to boost petroleum product supply and reduce product importation, annual GDP contribution of over $3.8 billion, and attraction of over $7 billion of foreign direct investment into the country.”
According to the statement, the NNPC Ltd. MOU agreement with Indorama follows Nigeria’s President Bola Ahmed Tinubu’s commitment in India a few weeks ago, to strengthen business relations between both countries.