Nigeria has reached an agreement with Shell to supply gas to its planned $3.8 billion Brass methanol facility.
According to the Minister of State for Gas, Ekperikpe Ekpo, on Thursday, it is a significant step forward in finalising the investment decision for the project.
Nigeria has Africa's greatest natural gas reserves of more than 200 trillion cubic feet but has challenges harnessing the resource due to capital restrictions and a lack of adequate infrastructure.
Ekpo disclosed in a statement that the Gas Supply and Purchase Agreement (GSPA), which is critical to the Brass methanol project, will be signed next month following fruitful discussions with Shell's Nigeria CEO and executives from other firms involved.
The GSPA will obtain a long-term gas supply from a joint venture controlled by Shell for the methanol manufacturing facility to be developed on Brass Island in the oil-rich coastal state of Bayelsa.
The statement read: "The NNPC/Shell joint venture partners are now fully committed to uninterrupted gas supply for the development of the Brass Methanol project.
"Mr President is very passionate about this project and wants something positive to happen in respect of the Brass Methanol project before the end of May this year.”
The Brass Methanol project encompasses a gas processing plant, a methanol production and refining facility, and export infrastructure for the methanol products.