(Bloomberg) -- Nigerian National Petroleum Corp. and partners including Shell, TotalEnergies and Agip struck a landmark deal to sell gas to the methanol-manufacturing project of the country’s Brass Fertilizer & Petrochemical Co. Ltd.
The so-called gas sales-and-purchase agreement was signed on Friday in the capital, Abuja, nine years after the project was first announced.
Gas minister Ekperikpe Ekpo said the signing represented “a significant milestone in ongoing efforts to monetize Nigeria’s vast gas reserves.” The accord will enable Brass and its partners to proceed with construction of the $3.3 billion project.
Nigeria, Africa’s largest crude producer, is trying to pivot away from its reliance on oil by promoting investment in the country’s largely unexploited 200 trillion cubic feet of proven gas reserves. Most of the nation’s gas output is currently either flared or re-injected into wells.
The NNPC and its partners are expected to deliver an estimated 270 million standard cubic feet of gas daily to the project, located on Brass Island in southern Bayelsa state.
The government expects the project to generate more than $1.5 billion annually from exports of fertilizers, petrochemicals, and other gas-based products on completion, Ekpo said in a statement.
“In addition to boosting exports, the project will reduce fertilizer imports by 30%, saving Nigeria approximately $200 million in foreign exchange annually,” as well as creating thousands of jobs.
Brass said recently it had reached an agreement with COSCO Shipping Lines Co Ltd. for 16 new methanol-powered vessels that will move products from the methanol plant to global destinations.
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