The Nigerian National Petroleum Company Limited (NNPCL) recently entered into a gas supply contract with Indorama Eleme Petrochemicals Limited, aiming to enhance income generation and fortify energy stability.
The Memorandum of Understanding (MOU) between NNPC Ltd. and Indorama comes President Bola Tinubu garnered pledges amounting to $14 billion from diverse Indian investors, affirming his commitment to establish a secure environment for foreign investments.
As per the statement by the NNPCL, the agreement’s execution aligns with their objective of encouraging the adoption of natural gas within the large-scale gas-consuming sectors.
This initiative is anticipated to yield $18 billion in revenue for the federal government and, in the long run, contribute significantly to achieving energy security for the nation.
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NNPCL driving Nigeria’s Nigasification strategy
As the nation’s energy corporation, NNPC Ltd. has a pivotal responsibility as defined in article 64(i) of the Petroleum Industry Act (PIA) – that of advancing the adoption of natural gas through the establishment and management of extensive gas utilization enterprises.
This role is in perfect harmony with Nigeria’s Nigasification strategy, a comprehensive initiative undertaken by the company to harness the potential of natural gas and its related liquid products as the preferred energy source.
This strategic approach aims to stimulate economic development, liberate crude oil for export purposes, and ultimately foster job creation.
We are seeing an annual contribution of $3bn to the nation’s GDP and a lifetime contribution of $18bn to government revenue.
As the owner of the world’s largest single-train Urea Plant situated in Port Harcourt, Nigeria, Indorama is presently engaged in expansion initiatives slated for completion within the coming six years.
The company has an aspiration to establish the most extensive Petrochemical Hub on the African continent.
These expansions will encompass a range of gas-based heavy manufacturing sectors, such as fertilizer, methanol, and petrochemicals.
Manish Mundra, Managing Director/Chief Executive Officer of Africa Indorama Energy said:
This is a strategic collaboration to unlock Nigeria’s upstream sector, but more importantly, to partner downstream, in order to share the value chain. Nigeria’s gas reserves should position the country as one of the largest producers of urea in the western hemisphere.
Key benefits of the NNPCL-Indorama agreement
According to the statement released by the NNPCL, the following key benefits were under listed:
Monetization of over 1.7 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 fertilizer to boost national food security.
Creation of about 55,000 direct and indirect employment opportunities.
Development of a condensate refinery to boost petroleum product supply and reduce product importation.
Annual GDP contribution of over $3.8 billion.
Attraction of over $7bn of foreign direct investment into the country…READFULL