Nigeria Signs Gas Supply Agreements With Shell, Chevron for Power Stations

Nigeria’s state-owned energy company signed agreements today with local units of Royal Dutch Shell Plc (RDSA) and Chevron Corp. (CVX) for the supply of natural gas to the country’s power stations.

The two agreements, which cover the supply of more than 70 percent of the total gas requirements to the domestic power industry, serve as a framework for future agreements, Petroleum Minister Diezan Alison-Madueke told reporters today in Abuja, the west African nation’s capital.

“We are now in a position where we can very rapidly replicate these agreements across all other power plants,” she said. “ Although it has taken a while to close the negotiations, the knock-on effect in terms of other agreements that can be immediately executed is phenomenal.”

Nigeria, holder of Africa’s largest gas reserves, wants to expand transmission and processing facilities to deliver the fuel to power plants in order to increase generation more than fourfold to about 14,000 megawatts by 2013. Most of the gas currently pumped with crude oil in the nation is flared off due to inadequate infrastructure to process it.

Shell will supply 90 million standard cubic feet of gas a day to the country’s largest power plant under the new agreements signed, Osten Olorunsola, Shell’s vice president in charge of gas in sub-Saharan Africa, said today in an e-mailed statement.

“This will assure regular supply of gas and result in improved electricity supply in the country,” he said.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.