NNPC, others to build $3.5bn ‘Africa’s biggest methanol plant’ in Bayelsa
The Nigerian National Petroleum Corporation, the Nigerian Content Development and Monitoring Board and DSV Engineering have signed the final investment decision for the construction of a methanol production plant by the Brass Fertiliser and Petrochemical Company Limited, committing equity investment of $670m.
The plant, which is expected to have a capacity of 10,000 tonnes per day and come on stream by 2025, would be the largest methanol plant in Africa and the first in Nigeria, the NCDMB said in a statement on Saturday.
It said the construction phase “is expected to create 30,000 direct and indirect jobs and additional 5000 permanent jobs during the operations phase”.
According to the financing plan, the project is estimated to cost about $3.5bn.
“Aside from the equity from the NCDMB, NNPC and DSV, there is an impressive cast of lenders which includes a consortium of Chinese banks led by the China Exim Bank, African Development Bank, international commercial banks, regional banks and African institutions, and they would be expected to raise 70 percent of the project cost,” the NCDMB said.
It said other agreements that had been firmed up included a gas supply purchase agreement with the Shell Petroleum Development Company-led joint venture, offtake agreements and contracts for engineering procurement and construction and technology provider.
The Executive Secretary, NCDMB, Mr Simbi Wabote, the Group Managing Director of the NNPC, Mallam Mele Kyari and the Executive Vice-Chairman of BFPCL, Chief Ben Okoye, signed the FID on behalf of their organisations on Friday.
Speaking at the event, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the project was part of the strategic efforts to maximise value and monetise the country’s vast gas endowments.
He said President Muhammed Buhari had in July 2020 “approved the development of the Brass Gas Company with the sole aim of aggregating and monetising all stranded gas in the Brass area, which amounts to over 10 trillion cubic feet of gas, into the processing facilities to be built in the hub.”
He expressed confidence that the project would have significant economic and developmental impact on the country, including support for gas-based industries, revenue generation and import substitution for methanol needs of the nation that is currently 100 percent imported.
Other economic benefits include foreign direct investment, economic diversification, acceleration of Nigeria’s march to zero gas flaring and community development through the company’s plan to offer one percent equity to host communities, according to the NCDMB.
The NCDMB boss underscored the significance of two Federal Government’s agencies – NCDMB and NNPC – catalysing investments in the country.
He said the project would place Nigeria in the world’s map as one of the top 10 producers of methanol.
According to him, local content can only grow sustainably when there are oil and gas projects, and a mega project of this size provides opportunities to utilise local capacities and capabilities built over the years.
The GMD NNPC described the BFPCL as the third most important project that had taken FID in the last five years.
He said achieving FID for the project was proof of the Federal Government’s commitment to monetise the nation’s gas resources, notwithstanding the challenging investment environment.
He pledged the commitment of the NNPC to ensure the delivery of the methanol plant on schedule by 2025.
Kyari said, “The country is blessed with abundant gas resources, over 200 trillion standard cubic feet of gas proven, with potential of over 600 tscf. As energy transition processes go on, you must monetize these gases as quickly as possible.
“NNPC will continue to collaborate with all the strategic partners. We will ensure that feedstock is available for this project and subsequent projects that would happen in the Brass hub.”
