$3.6bn Integrated Gas Processing & Methanol Plant; Another Giant Strides From Mele Kyari

By Adewole Kehinde

When President Muhammadu Buhari on Monday, July 8, 2019 appointed Mallam Mele Kolo Kyari as the 19th Group Managing Director of the Nigerian National Petroleum Corporation, I saw his appointment as an opportunity of lifetime for him to give the NNPC a new direction in the way, its operations and businesses are well conducted, and give Nigerians a renewed hope.

As part of his agenda, the reform-minded oil, and gas industry technocrat, Mele Kyari on behalf of the NNPC, has taken a Final Investment Decision on what will be its first methanol production complex, with the $3bn integrated methanol and gas project will be situated in Odioma, Brass Island in Bayelsa state.

The facility is projected to be the largest methanol plant in Africa and the first in Nigeria.

The project, a joint venture between NNPC, the Nigerian Content Development and Monitoring Board and DSV Engineering, will bring in $3bn in Foreign Direct Investment and create 30,000 jobs during its construction and 5,000 during its operation.

A lump sum Turnkey Engineering, Procurement and Construction (EPC) contract has been awarded to the China Tianchen Engineering Corporation (TCC) while TATA Consulting Engineers are providing project management consultancy for the delivery of the plant in 2024.

According Brass Fertiliser & Petrochemical Co (BFPCL), 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.

I am aware that based on lessons learnt from the historic plaid relationships between host communities and oil and gas companies, the project would allow for host communities to have equity shareholding participation to give them a sense of belonging. This will make the laudable project a huge success!

Nigeria is eager to monetise more of its gas resources, estimated at 200trillion 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.

It will be recalled that President Muhammadu Buhari had declared 2020 as Nigeria’s “Year of Gas”.

The Federal Government through the NNPC was able to begin building the landmark Ajaokuta-Kaduna-Kano pipeline in July, which will greatly expand gas availability in the country.

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.

The project is expected to have very significant economic impact on Nigerians including but not limited to support for gas based industries, revenue generation, import substitution for the methanol needs of the country that is currently 100 per cent imported, among others.

Adewole Kehinde is the Publisher of Swift Reporters and Chairman, Online Reporters Association of Nigeria. He can be reached via 08166240846, 08123608662

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