Petrochemical plants may soon be helping Nigeria capture more value from its hydrocarbons (TMS GmbH)

Nigeria plans $20bn gas-fired chemical hub in restive Niger delta

3 March 2017 | By GCR Staff 0 Comments

Nigeria plans to create a $20bn, a 27-square-kilometre industrial park in the Niger delta region for a batch of new chemical plants that use Nigeria’s abundant natural gas as a feedstock.

Up to 250,000 jobs will be created, the government claims, but there are concerns that violence in the region will disrupt the project. One legislator has insisted that local communities call off “irate youths”.

The Gas Revolution Industrial Park, or “GRIP”, is to be located in Ogidigben Delta State in the southeast of the country. It will combine refineries, petrochemical works and fertiliser factories, as well as other electricity-hungry industry such as aluminium smelting.

The announcement was made on Monday (27 February) by Yemi Osinbajo, who is Nigeria’s acting president while President Muhammadu Buhari receives treatment for an illness in the UK.

Osinbajo said the project would be financed as a public–private partnership, and that a consortium of Asian and Middle Eastern companies had already formed to take on a build, operate, transfer role, Nigerian media report.

Such companies are understood to include GS E&C of South Korea, the China Development Bank, Power China and the Arabian Gulf Mechanical Centre.

Acting President Osinbajo said the consortium had already presented a plan to him. Under it, “about $20bn would be invested to develop the GRIP, generating 250,000 direct and indirect jobs in the process”, he said.

Close by are more than 18 trillion cubic feet of gas reserves, say reports, ensuring a low-cost supply of both feedstock for petrochemical manufacturing, and of energy.

The area is also served by a deepwater port, centralised utilities, and services such as uninterrupted power, world-class telecoms and abundant water.

Firms setting up production plants will also benefit from tax breaks and regulatory waivers.

The Niger delta has long been the site of violence and protest among local communities who are angry about pollution and want a greater share of the oil wealth generated by the region.

This time the government is making efforts to strike a political bargain with local people before work begins.

The Delta State House of Assembly called a stakeholders’ meeting on 1 March to try and ensure that work goes smoothly on the scheme.

“We do not want irate youths to disrupt the project,” said Daniel Mayuku, a representative of Warri South-West constituency, reports local newspaper The Guardian.

“We call on the host communities to ensure peace while work lasts,” he added. “The Maritime University, which was almost taken away from the region, is the only project in the area. We hope that the gas project will be a stepping stone for others to come.”

Vice president Ogidigben is filling the role of president while the elected president, Muhammadu Buhari, is on a medical leave of absence. Buhari, 74, is reportedly suffering from Ménière’s disease, which affects the inner ear.

Image: Petrochemical plants may soon be helping Nigeria capture more value from its hydrocarbons (TMS GmbH)

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