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Nigeria - The Existing Plants.

Phase-I of the nation's master-plan was funded entirely by the government, through a combination of soft and commercial loans. Finance for Phase-II involved both government funding and a combination of soft and commercial loans and participation by foreign companies.

The Phase-I plants were originally to be completed during the Fourth Development Plan (1981-1985). But they came on stream in 1987. Plants for Phase-II were to start-up in 1987; they were completed in 1995.

Under a separate $1bn plan in the early 1980s, NNPC contracted Foster Wheeler of the US to study a project to produce 12 chemicals and plastics. This did not materialise, however.

Phase-I: In normal conditions, feedstocks for the Phase-I plants should come from the Warri and Kaduna oil refineries. The plants in Warri are operated by Warri Refinery & Petrochemicals Co. (WRPC). The Kaduna Refinery and Petrochemicals Co. operates those located in the Kaduna refining complex. But both refineries have been running well below their capacity.

The Warri complex is designed to provide decanted oil for production of six grades of carbon black, and propylene monomer from its fluid catalytic cracking (FCC) unit to produce polypropylene (PP).

When in operation at full capacity, the Kaduna oil refinery supplied reformate and paraffin-based kerosine from Venezuela's Lagomar crude oil, for production of linear alkyl benzene (LAB), heavy alkylate and benzene.

Nigeria's Phase-I Petrochemical Plants

Product                     Site             Capacity
Carbon black                Ekpan/Warri      25,000t/y
Polypropylene               Ekpan/Warri      35,000t/y
Linear alkyl benzene        Kaduna           40,000t/y
Heavy alkylate              Kaduna            2,700t/y
Benzene                     Kaduna           15,000t/y
Deparaffinated Kero Solvent Kaduna           35,000 /y

Production levels at these plants are usually well below capacity and now they are affected by the fall of the refineries' capacity use. This is despite the fact that domestic demand for products from the Phase-I plants has been strong, particularly in the case of PP. Even before early 2006, production had been affected by break-downs of various units at the Warri and Kaduna refineries.

Problems began in 1988, the first year after Phase-I 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. The carbon black plant was running at just 60% capacity since the late 1980s. In the 1980s, NNPC's prices of carbon black, a major component in tyre manufacture, 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 high cost. The situation since then has not improved.

Before early 2006, a shortage of raw materials had resulted in some Phase-I plants resorting to the recycling of scraps. That had led to a progressive degradation in the quality of products.

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Publication:APS Review Downstream Trends
Geographic Code:6NIGR
Date:Aug 17, 2015
Previous Article:Nigeria - Petrochemical Sector.
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