Shell to Supply Dangote Refinery 100mscf/d Gas for 10 Years

By Adedapo Adesanya

The Shell Petroleum Development Company of Nigeria Limited (SPDC) and its joint venture partners – Nigerian National Petroleum Company (NNPC) Limited, TotalEnergies EP Nigeria Limited, and Nigerian Agip Oil Company – have taken the final investment decision (FID) to build a dedicated upstream facility to supply 100 million standard cubic feet of gas per day to Dangote Fertiliser and Petrochemical Plant in Lekki, Lagos State, for 10 years.

The Managing Director of SPDC, Mr Osagie Okunbor, disclosed this last Friday in Port Harcourt, Rivers State, describing the FID as a significant step in supporting the Nigerian government’s Decade of Gas ambition.

“This investment decision is a critical step in pursuing the development of the gas-rich Iseni field, which is part of the Okpokunou Cluster in Oil Mining Lease 35 located in Sagbama Local Government Area of Bayelsa State,” Mr Okunbor said.

He added that SPDC and its joint venture partners remained committed to Nigeria’s Decade of Gas ambition and, particularly, the domestic gas agenda. The Decade of Gas initiative was launched by President Muhammdu Buhari in 2021 to boost the domestic gas market, deepen natural gas utilization as an alternative transportation fuel, virtual gas supply to off-pipeline grid gas customers, and gas utilization as feedstock for the development of gas-based industries.

Mr According to Mr Okunbor, increasing the delivery of natural gas to the domestic market is key to accelerated industrialization and economic development of 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.

Dangote boasts Africa’s largest granulated urea fertiliser complex and produces around 65 per cent of Nigeria’s domestic fertiliser requirements. The project will supply gas which will enhance the Dangote Fertiliser and Petrochemical Plant’s ability to deliver on its promise to the Nigerian people and government.

Recall that the new 650,000 barrel-a-day oil refinery commenced operations earlier this month. Initially targeting a processing rate of 350,000 barrels per day, the refinery aims to gradually escalate production towards its full capacity.

The $19.5 billion refinery, which was officially inaugurated by former President Muhammadu Buhari two weeks before the end of his administration in May 2023, will increase its production in phases. It has begun with the production of diesel and jet fuel.

The plant will not rely on Nigerian crude as it will consider other sources, including the US and Saudi Arabia. It recently bought 2 million barrels of West Texas Intermediate (WTI) Midland crude from Trafigura Group for delivery by the end of February.


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