The Nigerian National Petroleum Company Limited (NNPCL) has recently entered into a Memorandum of Understanding (MoU) with Indorama Eleme Petrochemicals Limited.
This collaborative effort is geared towards exploring and capitalising on opportunities within Nigeria’s hydrocarbon value chain. Mele Kyari, the Group Chief Executive Officer of NNPCL, expressed confidence that this venture would unlock unprecedented value from natural gas.
Kyari emphasised the pivotal role of NNPCL as the national energy company; citing Article 64 (i) of the Petroleum Industry Act (PIA). The company is mandated to champion the use of natural gas by developing and operating large-scale gas utilisation industries.
This objective dovetails seamlessly with Nigeria’s Nigasification strategy; a comprehensive initiative aimed at harnessing natural gas and its by-products as the primary energy source. The broader goals encompass stimulating economic growth, freeing up crude oil for export, and facilitating job creation.
The NNPCL envisions a significant economic impact through this endeavor. Kyari anticipates an annual contribution of $3 billion to the nation’s GDP, with a lifetime revenue projection of $18 billion for the government. As part of its grand vision to operate the largest Petrochemical Hub in Africa, Indorama, owner of the world’s largest single train Urea Plant in Port Harcourt, Nigeria, is in the process of expanding operations over the next six years. This expansion will focus on gas-based heavy manufacturing industries, including fertilizer, methanol, and petrochemicals.
Manish Mundra, the Managing Director and CEO of Africa Indorama Energy, in his view, said this partnership represents a strategic move to unlock Nigeria’s upstream sector and establish a strong downstream presence. He emphasised Nigeria’s significant gas reserves; positioning the country as a major urea producer in the western hemisphere.
The benefits of this collaboration are manifold. It involves the monetisation of over 1.7 TCF of gas and tapping into 100 million barrels of oil reserves. This venture anticipates generating upstream lifecycle revenue exceeding $18 billion, and an annual downstream production capacity of approximately 4.8 Million Tonnes Per Annum (MTPA) of products including methanol, urea, and fertilizer; thus bolstering national food security.
Additionally, this initiative is set to create about 55,000 direct and indirect employment opportunities. It aims to develop a condensate refinery to enhance petroleum product supply and diminish importation. This project is projected to contribute over $3.8 billion annually to the GDP and attract over $7 billion in foreign direct investment into the country.
The MoU between NNPC Ltd. and Indorama is a testament to Nigeria’s commitment, as articulated by President Bola Ahmed Tinubu, to strengthen business ties between Nigeria and India. This collaborative effort holds the promise of reshaping Nigeria’s hydrocarbon value chain and making significant strides in the global energy landscape.