Dangote, NNPC, others take steps to boost fertilizer production
… as they sign gas agreement
As the Dangote Fertilizer Limited is ready to roll out soon, the company as part of its efforts to sustain production has signed a Gas Sale and Aggregation Agreement (GSAA) with the Nigerian National Petroleum Corporation (NNPC), Chevron Nigeria Limited (CNL) and Gas Aggregation Company of Nigeria Limited (GACN) as the ‘Aggregator.’
NNPC and CNL are obligated to supply 70mmScf/d of natural gas to Dangote Fertilizer Limited to enable it start up operation of the newly built fertilizer plant.
The Dangote Fertilizer Plant at Ibeju Lekki, Lagos, is a flagship mega fertilizer project designed to support the Federal Government’s drive to develop the agricultural sector and in turn improve the Nigerian economy. Natural gas is the feedstock of the Dangote Fertilizer Plant. This GSAA for the supply of the major raw material needed to run the fertilizer plant is another demonstration of the NNPC/CNL JV’s commitment to the domestic gas market.
Not only Nigerian banks are funding the fertilizer project but also foreign banks, the CBN is contributing about N50 billion for the fertilizer project. The amount Godwin Emefiele, CBN governor said was just a drop on the entire fund the project cost.
The bank will continue to show support to individuals and companies that display the determination to help and support government and the CBN in restructuring the base of this country, Emefiele said.
Although Nigeria is currently almost self-sufficient in fertilizer production, the size of the fertilizer plant is twice that of Eleme Petrochemical.
He urged other Nigerians to support government’s drive in developing the nation’s economy.
“I believe this project will transform Nigeria’s economy and we hope and pray that we will have other Nigerians join in the development of our own economy. It is not about word of mouth, it is by action. They need to risk their capital and do what they believe that will help and I think in a lot of areas, with the support of the government, we will try and transform them like we did in cement,” he said.
The $2 billion fertilizer production plant with the capacity of processing over 3 million tons of the product annually is the largest single-fertilizer complex in the world.
The plant, which covers 500 hectares of land, is aimed at not only meeting the supply needs of farmers across the sub-region towards boosting crop yield but also to reduce product cost.
“This is going to be one of the largest single capacity complex in the world producing in total 8,000 tons of urea daily. We’ll be having two trains of ammonia and two trains of urea and each train will produce 4,000 tons. So, in a year it will be 3 million tons.
“Fertilizer imports into the West Africa sub-region, especially from abroad, are expected to drop drastically by this development,” he said.
Anurag Jaiswal, a general manager in the company, had said the impact on the economy of Nigeria and the entire region cannot be over-emphasised.
“It is much expensive to import from abroad due to freight cost, but it will certainly be cheaper if you are importing from Nigeria. It will have a huge impact on the Nigerian economy because we will be saving a lot of foreign exchange,” he noted.
Chevron said the NNPC/CNL JV was committed to supporting the Federal Government of Nigeria’s policy to boost local industries.
The agreement was executed on behalf of the three companies by Jeffrey Ewing, chairman/managing director of CNL; Morgan Okwoche, managing director/CEO of GACN, and Devakumar Edwin, group executive director, Strategy, Capital Projects and Portfolio Development of DFL, respectively.