Nigeria inks $3.3 billion deal to supply gas to Brass methanol plant

Nigeria has signed a landmark agreement to supply gas to the $3.3 billion Brass Fertilizer & Petrochemical Co. Ltd. (BFPCL) methanol-manufacturing project. The deal, formalized on October 11, 2024, between the Nigerian National Petroleum Corporation (NNPC) and industry giants Shell, TotalEnergies, and Agip, marks a significant milestone in the country’s effort to monetize its vast natural gas reserves.

The gas sale-and-purchase agreement, signed in Abuja, comes nearly a decade after the project was initially announced. Gas Minister Ekperikpe Ekpo highlighted the importance of this development, stating that it would pave the way for the construction of the facility and further Nigeria’s ambition to shift away from crude oil dependence. The government sees the venture as a strategic move to tap into Nigeria’s largely underutilized 200 trillion cubic feet of proven gas reserves, which are currently flared or reinjected into wells.

Once operational, the BFPCL plant, located on Brass Island in Bayelsa State, will receive an estimated 270 million standard cubic feet of gas per day. The project is expected to generate over $1.5 billion annually through the export of petrochemicals, fertilizers, and other gas-based products, according to the Ministry of Petroleum Resources. The plant is also projected to cut Nigeria’s fertilizer imports by 30%, saving the country roughly $200 million in foreign exchange annually, while also creating thousands of jobs.

Beyond economic impact, the project supports Nigeria’s goal to reduce gas flaring and meet its target of ending routine flaring by 2030. The NNPC partnership underscores the country’s broader push to utilize natural gas for industrial development and power generation, as part of its strategy to diversify the economy away from oil.

In a related development, Brass Fertilizer has also entered into an agreement with COSCO Shipping Lines Co. Ltd. for 16 methanol-powered vessels. These ships will transport products from the methanol plant to global markets, enhancing Nigeria’s export capabilities.

The methanol plant, part of Nigeria’s broader energy strategy, positions the country to improve its standing in the global petrochemical industry, signaling a new phase of economic growth driven by natural gas.