NIGERIA - Fertilisers.

The National Fertiliser Company of Nigeria (NAFCON) has four plants at Onne, Rivers State, producing 1.2m t/y of urea and ammonia. This is below their design capacity - 750,000 t/y of ammonia and 1.1m t/y of urea. The first urea and ammonia plants were commissioned in 1988 as a JV with M.W.

Kellogg of the US. The other two plants went on stream in 1997 at the cost of about $500m. But both plants were defective and both were closed for repairs in late 1997 and early 1998. They went back on stream in April 1998, though they could only operate at a part of their design capacity. The main problem was that the new plants lacked advanced equipment as NAFCON could not pay for what the contractors required. Related facilities at the new plants include a unit producing nitrogen, a high-pressure carbonate condenser and a 25 MW gas turbine generator.

There is strong demand for fertilisers in this country where the majority of people are farmers. From the government's perspective, building a new complex with major fertilisers plants should also ease pressure from international organisations to make better use of the country's gas reserves, estimated at more than 120 TCF.

Proposals: Nigerian planners have for years been promoting new projects in the petrochemicals sector. Apart from those under Phase Three, ventures envisaged since the early 1990s have included methanol and MTBE plants.

Many companies had expressed an interest in petrochemical ventures, including Mobil (now part of ExxonMobil), Shell, Chevron, Methanex and Penspen. One project considered in 1992 was to build a $400m export-oriented methanol plant using gas produced by Chevron. The plant, with a capacity of 2,000-2,500 tons/day, was to be a joint venture between NNPC, Penspen, and Mannesmann of Germany, with Chevron invited to have a stake as well. At the time, it was said that ICI had guaranteed purchase of the methanol for at least 10 years after production start-up, which was planned to begin in 1995. The project did not materialise.

Mobil Producing Nigeria (MPN), the second biggest oil producer in Nigeria, had since 1993 discussed a plan to have a methanol complex built near its gas plant on Bonny island with a capacity of 900,000 t/y. This was to be part of the second phase of its development of the Oso gas/condensate field in Eket, east of Port Harcourt (see Gas Market Trends No. 6). Other projects envisaged by Mobil were an MTBE plant and an ammonia/urea complex. Proposals for these ventures, based on consultancy work done by Mobil Corp. of the US, were presented to the military government in 1993.

The ammonia/urea project continues to figure in ExxonMobil's list of ventures in Nigeria, which include a gas-fired power plant to be an IPP. ExxonMobil has no doubt about the potential for petrochemical demand in Nigeria, with a population of about 120 million expected to exceed 238 million in 2025 and plenty of cheap gas to provide the feedstock, but has major concerns about the non-commercial risks and lack of incentives.