NSIA, the OCP of Morocco and key operators in the oil and gas value chain executed 5 crucial agreements yesterday at the Mohamed VI Polytechnic University (UM6P) in Benguerir, Morocco.
The agreements are designed to create a clear path for the second phase of the Presidential Fertiliser Initiate as well as the creation and operationalization of a Multipurpose Industrial Platform (MPI) in Nigeria.
The parties to the agreement included the Nigerian National Petroleum Corporation (NNPC), Nigerian Content Development & Monitoring Board (NCDMB), GACN (Gas Aggregation Company Nigeria Limited), Akwa Ibom State Government, the Fertilizer Producers & Suppliers Association of Nigeria (FEPSAN) and Mobil Producing Nigeria (MPN).
Principally, 5 agreements were executed as follows:
- A Memorandum of Understanding (MOU) between Nigeria Sovereign Investment Authority (NSIA), OCP Africa and the Fertilizer Producers and Suppliers Association of Nigeria (FEPSAN) to commit to the second phase of the Nigerian Presidential Fertilizer Initiative (PFI II).
- A Shareholders Agreement (SHA) between the NSIA and OCP Africa for the creation of the Joint Venture Company (JVC) which will oversee the development of an industrial platform that will produce ammonia and fertilizers in Nigeria.
- A MOU between NSIA, OCP Africa and the Akwa Ibom State in Nigeria on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.
- A MOU between NSIA, OCP Africa, and the Nigerian National Petroleum Corporation (NNPC), to evaluate the opportunity of an equity investment by the NNPC in the JVC and for its support on gas.
- A Framework Agreement between NSIA, OCP Africa, Mobil Producing Nigeria (MPN), the NNPC and the Gas Aggregation Company Nigeria (GACN) on gas supply for the MPI.
The first two agreements relate to the second phase of the Presidential Fertiliser Initiative (PFI II) while the last three contracts underpin the creation of a Multipurpose Industrial Platform (MPI) to be sited in Akwa Ibom State.
The agreements on the second phase of the PFI give effect to the presidential directive which has restructured the PFI programme.
Under the revised structure, NSIA’s role moves upstream thereby limiting its involvement to bulk importation of raw materials on behalf of the fertilizer blenders, with bank guarantees provided by the blenders. This approach will make the programme more sustainable, strengthen the productive capacity of the blending plants and eliminate financial risk to the NSIA.
On the MPI project, three agreements were signed. The first is for land acquisition, the second for equity investment in the joint venture company to operate the MPI and the last for gas supply to the project.
The first phase of the MPI Project will produce 1.5 million tonnes per annum of Ammonia in two phases.
Up to 70% of the Ammonia produced will be allocated for export to Morocco and the balance will be routed to the production of 1 million tonnes per annum of Di-ammonium Phosphate (DAP) and NPK fertilizers to feed domestic demand. It is expected that project construction will commence no later than Q3, 2021. In the first phase of the project, US$1.4billion will be invested in building out the plant and its supporting infrastructure with a target operations-commencement date of 2025.
The project will be sited in Akwa Ibom State in a gas-rich location. Factors such as land availability and accessibility; gas adequacy; sufficiency of marine draft; and other environmental and social considerations informed the decision to site the plant in Akwa Ibom.
At completion, the integrated Ammonia and fertilizer plant will house – within its battery limits – the process plants for Ammonia and fertilizer production, administrative buildings, fertilizer bagging units, water purification units, storage for raw materials and finished goods, onsite power plant and other ancillary facilities. The plant will have a dedicated jetty to facilitate seamless importation of raw materials from Morocco and other suppliers and export of excess Ammonia and fertilizer to Morocco and potentially other regional markets.
Speaking on the development, His Excellency, Chief Timipre Sylva, Hon. Minister of State for Petroleum and head of the Nigerian delegation said “I assure you that President Muhammadu Buhari is very committed to actualisation of this project. He has mandated the Ministry of Petroleum Resources and all its agencies, notably the NNPC, DPR, NCDMB and all other government agencies to give maximum support for this project.”
Welcoming the Nigerian contingent, the Chairman and CEO of OCP, Dr. Terrab said “Ultimately, these agreements will strengthen the partnership between the NSIA and OCP Group and the different institutions in the gas industry in Nigeria. The outcome of today’s agreements will translate to knowledge transfer and broader economic opportunities as we build out the industrial platform. The platform will leverage the best of Nigerian and Moroccan natural resources, namely the Nigerian gas and the Moroccan phosphate and create a new basis for stronger ties”.
In his comment, Uche Orji, MD & CEO of NSIA said “this project forms a key part of NSIA’s gas industrialisation strategy and will deep intra-continental trade which is essential to Africa’s development and economic renaissance. This landmark project, the MIP, will explore increased levels of synergy between NSIA and OCP and the partners to the transactions and ultimately ensure that Nigeria builds an industrial base that is sustainable and complimentary to mutual objectives of developing the agriculture sector in Nigeria”. The changes to the PFI significantly reduces NSIA involvement and transfers the responsibilities to the blenders .
Speaking on the project, Mele Kyari, GMD NNPC remarked that the “NNPC and all its subsidiaries are committed to the project”. He further added that “NNPC is committed to taking equity stakes in the joint venture company and will ensure sufficient gas is available for the project to succeed”.
In his remarks, His Excellency Gov. Udom assured the parties that “Akwa – Ibom is committed to ensuring the PMI project is a resounding success. Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality. With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”.
Engr. Wabote, Executive Secretary, the Nigerian Content Development and Monitoring Board (NCDMB). “We are committed to ensure that clear operational guidelines and constructive oversight is provided to support the project. The investment is a welcome development, and we look forward to the commencement of the project”.
Speaking on the development, Ogunleye, Managing Director and Chief Executive Officer, Gas Aggregation Company Nigeria (GACN) remarked “We are looking forward project. All the support required for its success within our remit will be provided. We expect that this will encourage more investment of this nature in Nigeria”.
Making his comments, Thomas Etuh, Chairman FEPSAN, said “Nigeria possesses an enviable reserve of natural gas while Morocco is a leader in Fertiliser production. These comparative advantages make for a partnership between our two countries that is mutually beneficial and scalable. FEPSAN was a party to the first structure of the Presidential Fertiliser Initiative (PFI). We are working now to ensure that the results of the first phase are improved upon and broadened in the new structure.”