The Nigerian National Petroleum Corporation (NNPC) Limited, in collaboration with partners Shell, TotalEnergies, and Agip, has finalized a significant deal to supply gas to the methanol-manufacturing plant of Brass Fertilizer & Petrochemical Company Ltd.
The gas sales and purchase agreement, which marks a milestone for the project, was signed in Abuja on Friday, nearly nine years after its initial announcement.
Minister of Petroleum Resources (Gas), Ekperikpe Ekpo, described the agreement as “a significant milestone in the ongoing efforts to monetize Nigeria’s vast gas reserves.”
The deal paves the way for Brass Fertilizer & Petrochemical Company and its partners to commence construction of the $3.3 billion project.
NNPC and its partners are set to supply approximately 270 million standard cubic feet of gas daily to the facility, which will be situated on Brass Island in Bayelsa State.
Upon completion, the government anticipates the project will generate over $1.5 billion annually from exports of fertilizers, petrochemicals, and other gas-based products, Ekpo stated.
In his words, “In addition to boosting exports, the project will reduce fertilizer imports by 30%, saving Nigeria approximately $200 million in foreign exchange annually,”
What you should know
As Africa’s largest crude oil producer, Nigeria is seeking to reduce its dependency on oil by encouraging investment in its underutilized gas reserves, which amount to 200 trillion cubic feet. Currently, much of the country’s gas output is either flared or re-injected into wells.
Brass Fertilizer & Petrochemical Company recently announced an agreement with COSCO Shipping Lines Co. Ltd. To acquire 16 new methanol-powered vessels, which will transport products from its methanol plant to international markets.
Backstory
At the recently concluded Forum on China-Africa Cooperation, China Road and Bridge Corporation (CRBC) signed a key agreement with Nigeria’s Brass Fertilizer and Petrochemical Company Ltd.
- The deal, focused on the development of the Brass Industrial Park and methanol complex, is expected to bring an estimated $3.3 billion into the Nigerian economy.
- The Brass Oil and Gas City project seeks to establish Nigeria as a leading hub for downstream oil and gas manufacturing and industrial activities in Africa. Located on Brass Island in Bayelsa State, the development aims to become one of the largest global centers for petrochemical, fertilizer, refinery, and hydrocarbon processing.
- These initiatives will help create a world-class, export-oriented oil and gas processing city in Nigeria. So far, $3.5 billion has been committed to various projects within the Brass Oil and Gas City.
- The Brass Methanol Project, sponsored by Brass Fertilizer & Petrochemical Company Limited (BFPCL), is a joint venture between DSV Engineering Limited, the Nigerian National Petroleum Corporation (NNPC), and the Nigerian Content Development & Monitoring Board (NCDMB). BFPCL will own and operate the venture.