Nigeria: NNPC set to build USD 3 billion methanol plant

Nigeria’s bid to grow its domestic gas production received a major boost after state-owned oil firm Nigerian National Petroleum Corp. signed a final investment decision Jan. 29 to build the country’s first methanol-processing plant, located in the Niger Delta region.

The $3 billion plant will process about 14 Tcf of gas from oil fields scattered around the Niger Delta Brass area, Oil Minister Timipre Sylva said in a statement.

“This project signifies the federal government’s effort to maximize value and monetize Nigerian vast natural gas endowment. The project will have significant economic and development impact on the country including revenue generation and import substitution for the methanol needs of the country that is currently 100% imported,” Sylva said.

The plant is to be jointly owned by NNPC, the Nigerian Local Content Management Board and indigenous engineering company DSV Engineering Ltd.

Oil giant Shell will provide gas feedstock for the plant, which is expected to be completed in 2024, NNPC Managing Director Mele Kyari said in the statement.

“The project will create 30,000 direct and indirect jobs during construction and about 5,000 jobs during operation,” Kyari said.

Having seen its revenue from oil decline amid a drop in production, on the back of weaker global oil prices, the Nigerian government has said it could use its huge gas resources to raise income and create more jobs.

Nigeria has already braced itself for lower oil revenues in 2021 after the government reduced its output target to 1.86 million b/d and set an oil price level of $40/b in its budget.

In December, the government also launched a gas-processing plant to be fed by previously flared gas from oil fields owned by state-run Nigerian Petroleum Development Co., aimed at producing LPG and CNG for distribution across the country.

NNPC estimates domestic demand for natural gas rising from current levels pf 1.5 Bcf/d to 7.4 Bcf/d by 2027.

“This project signifies the federal government’s effort to maximize value and monetize Nigerian vast natural gas endowment. The project will have significant economic and development impact on the country including revenue generation and import substitution for the methanol needs of the country that is currently 100% imported,” Sylva said.

The plant is to be jointly owned by NNPC, the Nigerian Local Content Management Board and indigenous engineering company DSV Engineering Ltd.

Oil giant Shell will provide gas feedstock for the plant, which is expected to be completed in 2024, NNPC Managing Director Mele Kyari said in the statement.

“The project will create 30,000 direct and indirect jobs during construction and about 5,000 jobs during operation,” Kyari said.

Having seen its revenue from oil decline amid a drop in production, on the back of weaker global oil prices, the Nigerian government has said it could use its huge gas resources to raise income and create more jobs.

Nigeria has already braced itself for lower oil revenues in 2021 after the government reduced its output target to 1.86 million b/d and set an oil price level of $40/b in its budget.

In December, the government also launched a gas-processing plant to be fed by previously flared gas from oil fields owned by state-run Nigerian Petroleum Development Co., aimed at producing LPG and CNG for distribution across the country.

NNPC estimates domestic demand for natural gas rising from current levels pf 1.5 Bcf/d to 7.4 Bcf/d by 2027.


SOURCE: S&P Global

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