Dangote’s Fertiliser Plant to Receive Gas from Shell for a Decade

Shell and its joint venture partners to provide 100 million standard cubic feet of gas per day to Africa’s largest fertiliser complex

by Motoni Olodun

Shell Petroleum Development Company of Nigeria Limited (SPDC) and its joint venture partners have announced a final investment decision to build a dedicated facility for gas supply to Dangote Fertiliser and Petrochemical Plant in Lekki, Lagos State. The facility will provide 100 million standard cubic feet of gas per day to the plant for 10 years, starting from 2024.

The joint venture partners include the Nigerian National Petroleum Company Limited (NNPC), TotalEnergies EP Nigeria Limited, and Nigerian Agip Oil Company (NAOC). SPDC is the operator of the joint venture.

The gas supply project is part of the development of the gas-rich Iseni field, which is located in the Okpokunou Cluster in Oil Mining Lease 35 in Bayelsa State. The field is expected to produce about 300 million standard cubic feet of gas per day at peak production.

The project is also aligned with the Nigerian government’s ‘Decade of Gas’ initiative, which aims to leverage the country’s abundant gas resources for industrialization and economic growth. Nigeria has the largest proven gas reserves in Africa and the seventh-largest in the world, with about 206.5 trillion cubic feet as of 2023, according to the NNPC.

The Managing Director of SPDC and Country Chair of Shell Companies in Nigeria, Osagie Okunbor, said the investment decision was a critical step in supporting the government’s ambition and the domestic gas agenda.

“Increasing the delivery of natural gas to the domestic market is key to accelerated industrialization and economic development in Nigeria. The FID signals a positive step towards the construction of the required infrastructure for the project that is expected to create jobs through direct and indirect employment,” he said.

Dangote Fertiliser and Petrochemical Plant is the largest granulated urea fertilizer complex in Africa, with an annual production capacity of three million metric tons. It produces around 65 percent of Nigeria’s domestic fertilizer requirements and also exports to other African countries.

The plant is part of the Dangote Group’s vision to become a global leader in the production of fertilizer, petrochemicals, and refined petroleum products. The group is owned by Aliko Dangote, Africa’s richest man and a prominent industrialist.

The gas supply project is one of the several initiatives that Shell and its joint venture partners are undertaking to boost domestic gas utilization and curb gas flaring in Nigeria. Shell has also signed agreements with other gas off-takers, such as the Nigeria LNG Limited, the West African Gas Pipeline Company, and the Azura-Edo Independent Power Plant.

The project is also expected to contribute to the reduction of greenhouse gas emissions and the promotion of cleaner energy sources in Nigeria. Gas is considered a cleaner and cheaper alternative to oil and coal, as it emits less carbon dioxide and other pollutants when burned.

The project is also in line with the global trend of energy transition, which is driven by the need to address the challenges of climate change and achieve the Sustainable Development Goals. Many countries and companies are shifting from fossil fuels to renewable energy sources, such as solar, wind, and hydro.

Shell and its joint venture partners have expressed their commitment to support Nigeria’s energy transition and the development of a low-carbon economy. They have also invested in various social and environmental projects, such as community development, health, education, and biodiversity conservation.

The gas supply project is a testament to the strong partnership and collaboration between Shell, its joint venture partners, the Nigerian government, and the Dangote Group. It is also a demonstration of the potential and opportunities that Nigeria’s gas sector offers for the benefit of the nation and its people.

Source: The Guardian

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