NIGERIA: NNPC, Ajaokuta Steel Sign 20-Year Gas Supply Deal To Revive Steel Plant

By Onoja Baba

The Nigerian National Petroleum Company (NNPC) Limited and the Ajaokuta Steel Company Limited (ASCL) have signed a 20-year gas supply agreement aimed at reviving the Ajaokuta Steel Plant, in what the Federal Government described as a major step towards accelerating Nigeria’s industrialisation agenda.

The Memorandum of Understanding (MoU) for a Sale and Purchase Agreement was signed on Tuesday at the NNPC Towers in Abuja and is expected to provide the gas infrastructure required to restart operations at the nation’s foremost integrated steel plant.

The Federal Government said the agreement aligns with President Bola Ahmed Tinubu’s Renewed Hope Agenda, which seeks to drive industrialisation, economic diversification and sustainable economic growth.

Speaking at the signing ceremony, the Group Chief Executive Officer of NNPC Limited, Engr. Bayo Ojulari, reaffirmed the company’s commitment to ensuring a reliable and commercially viable gas supply to support the successful revival of Ajaokuta Steel Company.

Ojulari disclosed that both organisations had constituted a joint implementation team to fast-track the commercial and technical aspects of the partnership.

The Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, described the agreement as a major milestone in the Federal Government’s efforts to restore the steel plant, noting that adequate gas supply remains critical to its recommissioning.

Also speaking, the Managing Director and Chief Executive Officer of Ajaokuta Steel Company Limited, Prof. Nasir Abdulsalam, described the agreement as a breakthrough that removes one of the major obstacles to the commencement of steel production at the complex.

According to him, the deal guarantees a reliable gas supply to the plant for the next two decades, addressing a long-standing concern repeatedly raised by prospective investors.

The Minister of Steel Development, Prince Shuaibu Abubakar Audu, described the agreement as a “game changer” for the Federal Government’s plan to return Ajaokuta Steel Company to full operation.

He said the availability of dedicated gas supply provides one of the most critical requirements for the revitalisation of the steel plant and moves Nigeria closer to unlocking the enormous economic and industrial potential of Ajaokuta.

Audu said reviving the steel company remains a key component of the Tinubu administration’s industrialisation agenda, adding that the project would increase local steel production, reduce dependence on imported steel, create employment opportunities and stimulate growth across strategic sectors of the economy through greater utilisation of Nigeria’s vast gas resources.

He reaffirmed the Ministry of Steel Development’s commitment to working closely with the Ministry of Petroleum Resources and other stakeholders to ensure the successful resuscitation of the Ajaokuta Steel Plant in line with the administration’s target of building a one trillion-dollar economy by 2030.

The signing ceremony was attended by the Executive Vice President, Gas, Power and New Energy at NNPC Limited, Mr. Olalekan Ogunleye, the Managing Directors of NNPC Gas Infrastructure Company and NNPC Gas Marketing Limited, Mr. Declan Nwokoro, as well as other senior officials of NNPC Limited.