Business a.m.
The Nigerian National Petroleum Company (NNPC) Limited has entered into a Gas Sales and Purchase Agreement (GSPA) with major international oil companies including Shell Petroleum Development Company (SPDC), TotalEnergies, and Agip to secure the supply of gas to a $3.3 billion methanol plant being developed by Brass Fertiliser & Petrochemical Co. Ltd (BFCPL) in Bayelsa State.
Nigeria, the largest producer of crude oil in Africa, is looking to diversify its economy by attracting investments in its enormous yet largely untapped natural gas reserves, which are estimated to be around 200 trillion cubic feet.
Despite its vast gas reserves, Nigeria currently flares or re-injects a significant amount of its natural gas output, which not only represents a waste of a valuable resource but also contributes to air pollution and environmental degradation.
The signing of the gas sales-and-purchase agreement was held recently in Abuja under the supervision of Ekperikpe Ekpo, minister of State Petroleum Resources (Gas), nine years after the project was initially announced. It is anticipated to produce an annual income of more than $1.5 billion from the export of fertilisers, petrochemicals, and other products derived from natural gas.
The agreement also includes the provision of 270 million standard cubic feet of gas per day to Brass Fertilizer & Petrochemical Co. Ltd,making it the largest single gas supply agreement for any domestic gas off-taker in Nigeria.
Ekpo described the event as “a significant milestone” in the ongoing efforts to monetise Nigeria’s vast gas reserves,adding that achieving the agreement proved Nigeria’s commitment to a business-friendly environment and investor-friendly policies.
He expressed his belief that the project would result in an influx of much needed Foreign Direct Investment (FDI), as well as the creation of thousands of jobs for Nigeria’s growing population.
The minister stated: “While this signing ceremony is a significant milestone in the development of the $3.3 billion Brass Methanol project, it is one more step in the journey to making the project a reality, and I urge all parties to continue in the same steadfastness that has enabled us surmount all previous huddles.
“It is my expectation, that within the shortest possible, BFPCL and its partners will achieve financial close and commence actual construction of this project of national importance, which we expect to bring in much needed FDI and create thousands of jobs for our teeming population, while changing the face and fortunes of the host state and community for good.”
In his remarks, Nicholas Ella, the permanent secretary of the ministry of petroleum resources, stressed the importance of the agreement in unlocking the potential of Nigeria’s vast natural gas reserves, which are currently estimated at over 209 trillion cubic feet.
Speaking further on the economic benefits of the project, he said, “The Brass Fertiliser and Petrochemical Project, valued at $3.5 billion, is set to generate more than $1.5 billion annually from exports of fertilisers, petrochemicals, and other gas-based products.
“In addition to boosting exports, the project will reduce fertiliser imports by 30 percent, saving Nigeria approximately $200 million in foreign exchange annually.
“Furthermore, it is projected to contribute around $600 million annually to Nigeria’s Gross Domestic Product (GDP), with a broader economic impact of up to $2 billion per year, thanks to the growth it will spur in related industries.
“The project will also create over 5,000 direct jobs and 35,000 indirect jobs, significantly improving the livelihoods of many Nigerians, particularly in the Niger Delta region.”
The permanent secretary also commended the SPDC Joint Venture partners who, according to him, have collectively invested over $15 billion in Nigeria’s gas infrastructure over the past decade.
Oritsemeyiwa Eyesan, executive vice president, upstream, at NNPC, in her comments at the signing ceremony, stated that the event marked the completion of one of the essential steps necessary for the progression of the 10,000 tonnes methanol plant in Nigeria.
Eyesan also highlighted the key role that the recent executive orders issued by President Bola Tinubu played in enabling the development of Nigeria’s resources in an efficient manner.
On his part, Ben Okoye, the managing director of Brass Fertilizer & Petrochemical Co. Ltd, spoke on the need to promptly exploit Nigeria’s vast natural gas deposits.
Okoye underscored the importance of capitalising on the country’s abundant gas resources as soon as possible, citing the growing urgency to utilise the gas before it becomes less relevant in the face of global shifts towards renewable energy sources.
Brass Fertilizer & Petrochemical Co. Ltd is a joint venture company established in 2009 by DSV Engineering Limited (DSV) and two Nigerian state-owned enterprises – Nigerian National Petroleum Company Limited and Nigerian Content Development & Monitoring Board (NCDMB).
The project is a comprehensive industrial development located on Brass Island in Bayelsa State. It involves the construction of several key components, including a gas supply network that comprises gas fields, wells, and pipelines; a natural gas processing plant; a methanol production and refining plant; product export facilities; and associated utilities and infrastructure.
