Dangote, Chevron Nigeria Sign Historic Agreement on Gas Supply
Abuja and Lagos — Chevron Nigeria Limited (CNL), operators of the Nigerian National Petroleum Corporation (NNPC)/ Chevron joint venture projects yesterday said it has signed a Gas Sale and Aggregation Agreement (GSAA) with Dangote åGas Aggregation Company of Nigeria Limited (GACN) as the aggregator.
Dangote Fertilizer Limited (www.Dangote.com) has entered into a long-term agreement with Chevron Nigeria Limited (CNL) for the delivery of Natural Gas from Chevron’s supply portfolio to the fertilizer plant, which is poised to start operations soon.
The contract, under the Gas Sale and Aggregation Agreement (GSAA) is part of International Oil Company (IOC)’s gas obligation to the domestic market through the Gas Aggregation Company Limited (GACN).
The signing ceremony, held at the Department of Petroleum Resources (DPR) office in Lagos, was executed on behalf of the parties by Group Executive Director, Strategy, Capital Projects & Portfolio Development, Dangote Industries Limited, Devakumar Edwin; Chairman/Managing Director, Chevron Nigeria Limited (CNL), Jeffrey Ewing; Head, Gas Monitoring & Regulation Division, Department of Petroleum Resources (DPR), Sanya Bajomo; and Managing Director/CEO, Gas Aggregation Company Nigeria Limited (GACN), Engr. Morgan Okwoche.
Dangote Fertilizer Limited, which is ready to be commissioned before the end of this year, will produce 3.0 million metric tonnes per annum (mmtpa) of Urea.
The fertilizer plant consists of twin train, with each single train having a capacity of 1.5 million tonnes per annum of Urea and Ammonia, which makes each of them the largest train available in the world. Hence the total capacity of the plant is 3 million tonnes per annum, and it sits on an area of 500 hectares.
Speaking at the signing ceremony, Group Executive Director, Strategy, Capital Projects & Portfolio Development, DIL, Devakumar Edwin, commended the Managing Director of GACN for his role in the new business relationship between Dangote Fertilizer Limited and Chevron Nigeria Limited.
He said the company is looking forward to having a long-term relationship with Chevron Nigeria Limited as well as synergies in other upstream and wider areas of operations in the oil and gas sector.
Chairman/Managing Director, CNL, Jeffrey Ewing commended GACN, DPR for helping with the signing of the gas supply agreement. He said: “We are looking forward to working with Dangote Fertilizer and maintaining a good relationship with the company. This agreement is very important for the country and Chevron is committed to Nigeria’s economic development.”
The Managing Director/CEO, GACN, Morgan Okwoche, expressed delight to be part of the domestic gas agreement. “This is the beginning of fruitful relationship between Dangote Fertilizer Limited, Chevron Nigeria Limited and other parties. I am excited that this is happening during my term in office. You cannot imagine my satisfaction in having this contract signed at this time,” he said.
Head, Gas Monitoring & Regulation Division, DPR, Sanya Bajomo, said: “I am glad that GACN, Chevron and Dangote have signed this gas supply agreement. I want to say that this gas supply agreement is an issue of national interest and what happened today is going to be transmitted to the presidency. I believe everybody is going to benefit from this agreement when the fertilizer plant starts operation.”
The agreement commits NNPC and CNL to supply 70mmScf/d of natural gas to Dangote Fertiliser Limited to enable startup and operation of the newly- built fertiliser plant.
A statement from Chevron said the agreement was executed on behalf of the three companies by Jeffrey Ewing, Chairman/Managing Director of CNL; Morgan Okwoche, Managing Director/CEO of GACN; and Devakumar Edwin, Group Executive Director, Strategy, Capital Projects & Portfolio Development of DFL, respectively. (NNPC executed the GSAA subsequently.)
The Dangote Fertiliser Plant at Ibeju, Lekki, Lagos, is a flagship mega fertiliser project designed to support the federal government’s drive to develop the agriculture sector and in-turn improve the Nigerian economy.
Natural gas is the feedstock of the Dangote Fertiliser Plant. This GSAA for the supply of the major raw material needed to run the fertiliser plant is another demonstration of the NNPC/CNL JV’s commitment to the domestic gas market.
The NNPC/CNL Joint Venture (JV) is currently the largest and most on-spec supplier of gas to the domestic market.The JV continues to collaborate extensively with other stakeholders in finding creative solutions to issues relating to the domestic gas market.
Distributed by APO Group on behalf of Dangote Group.