By Onome Amuge.
The Nigerian National Petroleum Company (NNPC) Limited has signed a memorandum of understanding (MoU) with Indorama Eleme Petrochemicals Company Limited to promote the use of natural gas by large-scale gas utilisation industries.
The deal, estimated at $7 billion, was signed by Mele Kyari, the group chief executive of the NNPCL, on behalf of the national oil company while Manish Mundra, the managing director of Indorama, signed on behalf of the Indian conglomerate.
Following the agreement ,the NNPC and Indorama will commence exploration and development projects within the remits of both party’s interests across the hydrocarbon value chain which would see the NNPC supply Indorama about 800 million standard cubic feet (SCF) of gas.
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Consequently, the deal is expected to unlock a lifetime value of about $18 billion revenue and add $3 billion to the country’s gross domestic product (GDP).
Speaking at the event, Kyari said the NNPC as the national energy company has one of its roles as enshrined in article 64(i) of the Petroleum Industry Act (PIA) to promote the use of natural gas through the development and operation of large-scale gas utilization industries.
According to the NNPC chief, the role is in alignment with its Nigasification strategy which is a consolidation of critical programmes as directed by President Bola Tinubu in alliance with the company’s plan to utilise natural gas and its associated liquids to be the energy source of choice for businesses and individuals on demand.
Highlighting the key benefits of the pact, Kyari said it would assist in the monetisation of over 1.7 trillion cubic feet (TCF) of gas and 100 million barrels of oil reserves, generation of upstream lifecycle revenue of over $18 billion including government take of over $7 billion, downstream production of about 4.8 million tonnes per annum of products including methanol, urea, and fertilizer to boost national food security.
Kyari assured that when gas is made available, more industries will spring up, the power supply will be boosted and employment will be created, thereby leading to an economic boom.
In his words, “So, it’s clear there’s a huge connection between harnessing gas resources and this event. And therefore, when the president said we should find gas for Indorama, we had no difficulty coming up with a solution. And the solution is very simple.
“We have resources and we will make available the additional gas that is required. We will partner with Indorama so that we sweat the upstream assets and also produce the gas.
“We will go down the chain and create the midstream facilities for these industries. For urea, increased fertiliser production and of course, including the creation of a condensate refinery.”
Kyari also pointed out that the project will open more vistas for further agreements with other entities in its plan to deploy gas for Nigeria’s industries.
Manish Mundra,the managing director/chief executive of Indorama Eleme Petrochemicals, remarked that the new deal will further boost the extant business relationship of the almost 17-year-old partnerships that had existed between both parties.
Mundra said the partnership is a strategic collaboration to unlock Nigeria’s upstream sector as well as partner downstream to share the value chain which is where the business lies.
“What we are going to do while we are working together on gas resources, is also to partner downstream and invest in at least two more lines of fertiliser, two lines of methanol, and one big petrochemical project besides the condensate refinery and other pipeline infrastructure which we are going to do,” he said.
According to the Indorama MD, Nigeria’s gas reserves and strategic location should position the country as one of the largest producers of urea,ammonia,methanol and petrochemical polymers in the Western hemisphere.