Bayelsa Methanol Plant: Chinese Bank, AfDB, others to raise 70% project cost

By Prince Okafor & Obas Esiedesa

As a major boost to Nigeria’s economy, a fresh indication has emerged that China Exim Bank, African Development Bank (AfDB), international commercial banks amongst other international donors are expected to fund 70 percent of the nation’s Methanol Plant project total cost.

The project which Final Investment Decision (FID) was signed over the weekend by the Nigerian National Petroleum Corporation, NNPC, Nigerian Content Development and Monitoring Board (NCDMB), along with DSV Engineering (an indigenous Nigeria company) will be situated Bayelsa State.

Other donors include, regional banks and African institutions

The facility would be the largest methanol plant in Africa and the first in Nigeria and the construction phase is expected to create 30,000 direct and indirect jobs and additional 5000 permanent jobs during the operations phase.

Other agreements that have been firmed up include a Gas Supply Purchase Agreement (GSPA) with the Shell Petroleum Development Company (SPDC) led joint venture, off-take agreements and contracts for Engineering Procurement and Construction and technology provider.

The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote, the Group Managing Director (GMD) of the NNPC, Malam Mele Kolo Kyari and Executive Vice-Chairman of BFPCL, Chief Ben Okoye signed the FID on behalf of their organisations.

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Speaking during the signing, the Minister of State for Petroleum Resources, Chief Timipre Sylva said the project was part of the strategic efforts to maximize value and monetize the country’s vast gas endowments.

“President Muhammed Buhari had in July 2020 approved the development of the Brass Gas Company with the sole aim of aggregating and monetizing 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.”

“The project will 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.”

On his part, Wabote underscored the significance of two Federal Government’s agencies – NCDMB and NNPC catalysing investments in the country.

“The project will place Nigeria in the world’s map as one of the top 10 producers of methanol.

“Local Content can only grow sustainably when there are oil and gas projects. A mega project of this size provides opportunities to utilize local capacities and capabilities built over the years.

“Opportunities provided by this project in job creation, gas utilization, local availability of methanol for primary and secondary users, formed part of the basis of the Board’s decision to partner with Brass Fertiliser and Petrochemicals Company Ltd to enhance delivery of the project.”

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