The Nigerian National Petroleum Company Limited and Indorama Eleme Petrochemicals Limited have signed a Memorandum of Understanding, MOU, to explore and develop suitable opportunities within the remits of both parties’ interests across the hydrocarbon value chain in Nigeria.
The new agreement was conveyed in a statement by Garba Deen Muhammad, the Chief Corporate Communications Officer, NNPC Limited, who also noted that the move is a development that NNPC Ltd.’s GCEO, Mele Kyari, summarized thus: “NNPC Limited is on the threshold of making value out of gas beyond any imagination.”
The statement said, 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.
It explained that 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 NNPC Ltd.’s 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 fertilizer, methanol, and petrochemicals.
Speaking, the MD/CEO, Africa Indorama Energy, Manish Mundra, stated that “This is a strategic collaboration to unlock Nigeria’s upstream sector, but more importantly, to partner downstream, in order to share the value chain.” He said that “Nigeria’s gas reserves should position the country as one of the largest producers of urea in the western hemisphere.”
The statement quoted that key benefits of the opportunities include the monetization of over 1.7 TCF of gas and 100 million barrels of oil reserves, generation of upstream lifecycle revenue of over $18bn, downstream production of about 4.8 Million Tonnes Per Annum, MTPA, of products including methanol, urea, and fertilizer 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 $3.8bn, and attraction of over $7bn of foreign direct investment into the country.
According to the statement, the NNPC Limited’s 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.