NIGERIA - Petrochemical Sector.The civilian government of President Obasanjo has failed to deliver on promises to turn Nigeria into a centre for petrochemical production in West Africa West Africa
A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century.
West African adj. & n. . This is despite strong domestic demand for chemicals, high oil prices since Obasanjo came to power in June 1999 and excellent export opportunities to neighbouring countries.
Nigeria is rich in oil and natural gas feedstocks produced at relatively low cost. It has been said for years that, if the incentives improved, these feedstocks should attract investors in new petrochemicals projects from among Western companies operating Nigeria's main petroleum ventures.
Foreign companies producing oil and gas in Nigeria have proposed several big joint ventures to produce olefins and polymers, a range of aromatics, methanol and MTBE MTBE Methyl-tert-butyl-ether Surgery An aliphatic ether that rapidly dissolves cholesterol stones in vivo, introduced under local anesthesia via a percutaneous transhepatic cholecystectomy catheter, as a non-invasive method for treating gallstones; after injection, . They have pledged to finance these projects. But their main conditions, as ExxonMobil keeps demanding, are that they should control these ventures and that prices of their chemicals sold on the local market are set at international market levels. Now the petrochemical sector is controlled by the state-owned Nigerian National Petroleum Corp. (NNPC NNPC Nigerian National Petroleum Corporation
NNPC Nigerian National Petroleum Company ) which has a monopoly on the main chemicals sold in the country.
Nigeria has had a three-phase master plan, launched in the 1970s, to produce a wide range of petrochemicals. But so far only two of the phases have come on stream, after several years of delay in each phase caused primarily by lack of financing and bad management by successive military regimes. The sector reached an important threshold in late 1995 with completion of the Phase Two plants.
Local production of a wide range of chemicals is vital as it should help substitute products currently imported at high cost, thus saving hard currency. Exports to nearby countries would generate income much needed in the downstream sector for expansions, maintenance, spare-parts, etc.
As in the refining industry (see DT No. 6), existing pretrochemical plants often have to operate below capacity or to shut down as a result of poor maintenance, lack of feedstocks due to refinery breakdowns, debts, etc. Construction of new plants is always delayed. Work on the Eleme polyethylene plant, located near Port Harcourt Port Harcourt (här`kərt, –kôrt), city (1991 est. pop. 362,000), SE Nigeria, a deepwater port on the Bonny River in the Niger delta. , was delayed for eight years because of the government's heavy debts to French and Japanese contractors working on the project.
The Existing Plants: Phase One was funded entirely by the government, through direct finance and a combination of soft and commercial loans. Finance for the second phase involved both government funding and a combination of soft/commercial loans and participation by foreign companies.
The Phase One plants were originally to be completed during the Fourth Development Plan period (1981-1985). But they came on stream in 1987. Plants under the second phase were to be operational in 1987; they were completed in 1995. Under a separate $1 bn plan considered in the early 1980s, NNPC had contracted Foster Wheeler International Corp. of the US to study a complex to produce 12 chemicals and plastics. This did not materialise.
Phase One: Phase One feedstocks come from the Warri and Kaduna refineries. The plants in Warri are operated by Warri Refinery & Petrochemicals Co. (WRPC WRPC Wisconsin Resources Protection Council
WRPC Withlacoochee Regional Planning Council
WRPC White Rose Pothole Club (England)
WRPC Workshop on Randomized Parallel Computing
WRPC Wives of Railway Postal Clerks ). The Kaduna Refinery and Petrochemicals Co. operates those located in the Kaduna refining complex. The Warri complex provides decanted oil for the production of six grades of carbon black, and propylene propylene /pro·pyl·ene/ (pro´pi-len) a gaseous hydrocarbon, CH3CHdbondCH2.
propylene glycol a colorless viscous liquid used as a humectant and solvent in pharmaceutical preparations. monomer monomer (mŏn`əmər): see polymer.
Molecule of any of a class of mostly organic compounds that can react with other molecules of the same or other compounds to form very large molecules (polymers). from its fluid catalytic cracking (FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. ) unit to produce polypropylene. The Kaduna refinery supplies reformate and paraffin-based kerosine kerosene, kerosine
see paraffin (2). from Venezuela's Lagomar crude oil, for the production of linear alkyl alkyl /al·kyl/ (al´k'l) the monovalent radical formed when an aliphatic hydrocarbon loses one hydrogen atom.
n. benzene (LAB), heavy alkylate alkylate
to treat with an alkylating agent. and benzene.
Nigeria's Phase One Petrochemical Plants Product Site Capacity Carbon black Ekpan/Warri 25,000 t/y Polypropylene Ekpan/Warri 35,000 t/y Linear alkyl benzene Kaduna 40,000 t/y Heavy alkylate Kaduna 2,700 t/y Benzene Kaduna 15,000 t/y Deparaffinated Kero Solvent Kaduna 35,000 t/y
The production levels at these plants are usually well below capacity. This is despite the fact that domestic demand for products from the Phase One plants has been very strong, particularly in the case of polypropylene. Production has been affected by repeated breakdowns of various units at the Warri and Kaduna refineries.
Problems began in 1988, the first year after Phase One came on stream. A scarcity of hard currency led to shortages of raw materials and spare-parts, with plants often shut down as a result. Polypropylene production was stopped for a while in November 1988 because the FCC unit at Warri stopped operating.
The carbon black plant was running at just 60% capacity in 1988-89. At the time NNPC's prices of carbon black, a major component in tyre manufacturing, were competitive when compared with the cost of imports.
Despite the low cost, the main customers, the Nigerian associates of Dunlop and Michelin, continued to buy most of their needs from overseas suppliers because the plant produced only three of the five hard grades required for tyre manufacture. The range could only be expanded at a very high cost.
Shortage of raw materials resulted in some Phase One plants resorting to the recycling of scraps, and this led to a progressive degradation in the quality of products. The private sector at the time had few incentives to invest in this business.
Phase Two: Originally scheduled for completion in 1987, the 330,000 t/y ethylene complex under Phase Two came on stream in June 1995, together with a unit to produce 90,000 t/y of propylene and 22,000 t/y of butene-1. The 250,000 t/y swing plant to produce high density polyethylene High-density polyethylene (HDPE) is a polyethylene thermoplastic made from petroleum. It takes 1.75 kilograms of petroleum (in terms of energy and raw materials) to make one kilogram of HDPE. and/or linear low density polyethylene Linear low density polyethylene (LLDPE) is a substantially linear polymer (polyethylene), with significant numbers of short branches, commonly made by copolymerization of ethylene with longer-chain olefins. came on stream in late 1995, along with an 80,000 t/y polypropylene plant.
The complex is at Eleme near Port Harcourt, the site of Nigeria's oldest oil refinery in Rivers State Rivers State is one of the 36 states of Nigeria. Its capital is Port Harcourt. It is bounded on the South by the Atlantic Ocean, to the North by Imo and Abia States, to the East by Akwa Ibom State and to the West by Bayelsa and Delta states. . It is operated by Eleme Petrochemicals Co. Delays in completing the complex were largely due to heavy debts owed by the government to French and Japanese contractors working on the plant.
NNPC said in 1995 the complex will satisfy domestic demand as well as provide the state with $100m per annum Per annum
Yearly. in export revenues. In addition, Phase Two saved the country some $122m through import substitution.
Nigeria's Phase Two Petrochemical Plants Product Capacity Ethylene 330,000 t/y Propylene 90,000 t/y Butene-1 22,000 t/y Polypropylene 80,000 t/y Polyethylenes (HDPE, LDPE, LLDPE) 250,000 t/y
Delays in production by these plants in 1995 were also caused by damage to the NGL NGL - A dialect of IGL. extraction facility at Port Harcourt from an explosion earlier in the year. Agip, operating the extraction plant, resumed normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of in late 1995. The complex requires about 17,000 b/d of NGL.
Du Pont Du Pont (dpŏnt), family notable in U.S. industrial history. The Du Pont family's importance began when Eleuthère Irénée Du Pont established a gunpowder mill on the Canada handled the engineering work and supervised the construction of the LLDPE/HDPE units, under a contract signed in October 1988. Institut Francais du Petrole provided the process licence for the butene-1 plant. (Butene-1 is the base for LLDPE LLDPE Linear Low Density Polyethylene ). Preliminary designs were done by Spie Batignolles of France, Technimont of Italy, and Chiyoda and Kobe Steel of Japan. M.W. Kellogg of the US was also involved as a contractor.
Initially, Phase Two was criticised as being economically unviable because projections of domestic consumption levels indicated that only 60% of the planned output would be absorbed while export prospects would be limited. However, in August 1987, a World Bank financed study conducted by Standford Research Institute of California recommended the development of Phase Two as planned, with emphasis on ethylene, polyethylene and polypropylene.
NNPC has envisaged an expansion of the ethylene plant to 400,000 t/y. But work on this is not likely to start soon, because of chronic cash-flow problems faced by NNPC.
Phase Three: The next step by NNPC is to begin work on Phase Three projects, originally set to be completed by 1990. Related ventures have been on the drawing board since the 1970s. The objective of Phase Three is for Nigeria to be able to produce aromatics, such as xylene xylene (zī`lēn) or dimethylbenzene (dī'mĕthəlbĕn`zēn), C6H4(CH3)2 . (Aromatics can be used in the manufacture of a wide range of goods, including fibres and complex plastics).
Phase Three projects, when completed, will get feedstocks from the second refinery at Port Harcourt and ethane ethane (ĕth`ān), CH3CH3, gaseous hydrocarbon. It is a continuous-chain alkane. As a constituent of natural gas, it is used for fuel. It can be prepared by cracking and fractional distillation of petroleum. from the gas fields. It remains to be seen when this phase will be implemented.
When first conceived in the 1970s, Phases Two and Three were estimated to require $4 bn in investments. The projects were rejected by the World Bank in view of more cautious market projections for petrochemical demand at the time. The projects were scaled down as a result.