Nigeria Takes FID on First $3bn Methanol Project: Update
(updates with cost estimate)
Nigeria has taken a final investment decision on what will be its first methanol production complex, national oil company NNPC said on social media on January 29.
The $3bn integrated methanol and gas project will be situated in Odioma, Brass Island in Bayelsa state. Its operator is Brass Fertiliser & Petrochemical Co (BFPCL), a joint venture between NNPC, the Nigerian Content Development and Monitoring Board and DSV Engineering.
"Today's significant milestone of achieving an FID symbolises the full support of the fed govt for the construction & operation of the first methanol plant in Nigeria," Nigerian oil minister Timipre Sylva said in a statement. The project will bring in $3bn in foreign direct investment and create 30,000 jobs during its construction and 5,000 during its operation, he said.
NNPC did not say when the plant would start up.
According to BFPCL's website, the methanol plant will use gas from unexploited fields as its feedstock. The project will also involve the development of pipelines and a gas processing plant. Its production is expected to reach 1.7mn metric tons/year of methanol, as well as 1.3mn mt/yr of urea by 2025 after two development phases. The gas in the region had been considered for an LNG project, Brass LNG, but that never materialised.
Nigeria is eager to monetise more of its gas resources, estimated at 200 trillion ft3 (5.4 trillion m3) proven. A key part of this drive is building out the country's petrochemicals sector. The government also wants to encourage more motorists to switch to gas as a vehicle fuel, expand gas-fired power and heating generation and increase the use of gas as a cooking fuel.
Nigerian president Muhammadu Buhara declared 2020 was the country's "Year of Gas". Unfortunately this big push to expand the role of gas coincided with a global pandemic. Despite disruptions, Nigeria was able to begin building the landmark Ajaokuta-Kaduna-Kano pipeline in July, which will greatly expand gas availability in the country. But lawmakers were unable to achieve their aim of passing a long-delayed reform bill aimed at spurring upstream development.
Methanol is used to manufacture many other chemicals and solvents. A large share of it globally is converted into formaldehyde, used in plastics, paints, textiles, pigments and dyes. It is also used to make acetic acid, methyl tertiary-butyl ether, biodiesel and olefins. Methanol will be produced at the plant using technology supplied by Denmark's Haldor Topsoe, and it will be sold to BP under a 10-year contract, BFPCL states.
Ammonia, which is mostly used in fertilisers, will be marketed through US trading group Trammo.