…….Deal will save $1.8bn in forex for FG
……..Nigeria issues 2022 Domestic Gas Demand requirement estimated at 4.4bcf
The oil and gas industry in Africa witnessed what was described the biggest yield yet from the recently enacted Petroleum Industry Act (PIA) last Wednesday in Abuja when the Nigerian National Petroleum Company (NNPC) Ltd, and its leading partners, Shell Petroleum Development Company (SPDC) of Nigeria Limited, TotalEnergies EP Nigeria Limited, and Nigerian Agip Oil Company (NAOC) signed a gas sale and aggregation deal.
The gas sale aggregation deal involves a daily supply of 70 million standard cubic feet of gas to Dangote Fertiliser Company to boost production and for local and export purposes.
Leaders of the various organizations took time to seal the deal on the sidelines of the ongoing Nigeria International Energy Summit held in Abuja.
The signing of the agreement was complimented by release of a new Domestic Gas Demand Requirement for 2022 by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which estimates a demand of 4.4 billion standard cubic feet for the domestic market.
With over 206 trillion cubic feet of natural gas, Nigeria represents one of Africa’s strongest in terms of hydrocarbon deposits, exploration and production, but has a huge gas supply deficit despite rising demand.
Only recently, the South Africa based, African Energy Chamber put Nigeria’s annual gas production capacity at 1.450 billion cubic feet as the country recovers from 2020 low production levels due to COVID-19.
Commenting on the deal, the group managing director of the NNPC, Mele Kyari, said the additional gas would help bring in more foreign exchange into the country, especially with the current energy crisis.
He commended the NNPC partners in the deal, who said are also working under serious pressure to ensure that the deal was struck. He said their role is very important and appreciated by the Nigeria.
According to him, the administration of President Muhammadu Buhari takes agricultural production very seriously, the president himself being a farmer. He said that as the company which produces the bulk of Nigeria’s fertilizers, the Dangote group was deservedly positioned for the deal.
In his comments, chairman and chief executive officer of Dangote Group, Alhaji Aliko Dangote, affirmed that aside from Egypt, Nigeria was the topmost fertilizer producer in Africa, and pointed out that the Group’s Notore plant and Indorama’s plant have huge combined production capacity on the continent.
He state that besides meeting the domestic demand for fertilizer, his organization was working to ensure that Nigeria majorly retains its foreign exchange.
The Gas Sale and Aggregation Agreement between the multilateral organizations is the second big deal witnessed during the Nigeria International Energy Summit.
Last Monday, the Summit participants witnessed the Nigeria/Equatorial Guinea gas project Memoranda of Understanding (MoU) signing, which Nigeria’s minister of state, petroleum resources, Chief Timipre Sylvia said will, among others, facilitate investment inflow from Equatorial Guinea into Nigeria.
The deal with the Central African country entails Equatorial Guinea getting gas supply from Nigerian offshore fields, in what the minister described as “kicking off strategic collaboration.”
Shortly before the commencement of the Summit, Nigerian indigenous oil company, Seplat, announced its purchase of ExxonMobil’s shallow water assets in Nigeria via the acquisition of the U.S. oil company’s Nigerian subsidiary Mobil Producing Nigeria Unlimited.
Industry watcher said it is the first major deal in that magnitude in the Nigerian oil and gas sector since the Petroleum Industry Act (PIA) was signed into law by the President of the Federal Republic of Nigeria on August 16th, 2021.
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