Royal Dutch Shell has awarded a N7.8 billion ($49.9 million) contract to a Nigerian firm, S.C.C Limited, for the manufacture of line pipes, in an effort to boost local production capacity of a key pipeline making material.

Shell said in a statement, Monday, that it signed the contract with S.C.C in August and has worked with the firm to enhance its production process and capabilities such that it can now manufacture line pipes of varying diameters.

“The contract means line pipes are now available within Nigeria, saving money and time, and developing the right expertise and creating jobs at the same time,” Igo Weli, Shell’s General Manager said, adding that it was studying the findings of a feasibility study it commissioned this year on the establishment of a second mill in Nigeria which will manufacture other types of line pipes.

Nigeria has been trying to promote the use of local content particularly in its oil and gas industry in order to develop local capabilities and create employment.

Shell said it uses local contractors and hires workers from the communities in which it operates in compliance with Nigeria’s local content law. The company said it was investing $237 million to procure and commission a laboratory for mechanical, metallographic and corrosion testing in Nigeria and will train local personnel.

“In 2010, Shell-run companies in the country awarded contracts worth nearly $947 million to Nigerian companies. This represented more than 96 percent of the overall number of contracts and amounted to over 93 percent of the total expenditure on contracts,” it said in a statement.