Methanol as the energy of the futureFebruary 9, 2023
Ben Okoye, group managing director of Brass Petrochemical Company (BPCL), talks to The Energy Year about the company’s methanol project.
What is the current outlook for Nigeria’s petrochemical and fertiliser sector and how do you see domestic competition evolving?
Nigeria has a major role to play in the global petrochemical sector, but, unfortunately, we are starting late, even with our huge gas resources. We are currently focused on developing a gas-to-methanol plant and thus are not focused on fertilisers at the moment. We see methanol as the energy of the future for the entire energy transition process.
The domestic market for methanol is evolving, and we are currently collaborating with the Federal Ministry of Science, Technology and Innovation on developing and expanding the domestic market. Methanol will be replacing LPG and kerosene as sources of domestic energy, both in urban and rural areas in the near future and also as a source for hydrogen production.
BPCL has partnered with NNPC and the National Content Development and Monitoring Board for the construction of a 10,000-tonne-per-day methanol production plant in Bayelsa State. What progress has been made since signing the FID in January 2021 and how do you view the importance of the plant for the Nigerian economy?
A lot of progress has been made. We have commenced early site works and also just completed the project engineering (FEED) and design. We are also in the last phases of lender’s due diligence and hope to commence full-scale construction works by Q3 2023.
What challenges and scenarios do you expect when it comes to ensuring the financing and accelerated development of large-scale energy projects in Nigeria?
One major challenge has always been funding for large-scale projects on a project financing basis, but gas supply security and issues surrounding country risk are also major factors.
What is your take on Nigeria’s downstream sector deregulation? What additional changes must be done to provide incentives for downstream players?
Deregulation is the only option that makes sense in the evolving energy sector. With the global focus on climate change, the funding for fossil fuels will become more expensive and even more difficult to access. So, the federal government and other government agencies must also bring this to the fore as incentives are being formulated.
How well positioned is Nigeria to become a major energy and LNG exporter in the years to come?
The [Russia-Ukraine] war and its aftermath have created huge potential for Africa. Where other countries in sub-Saharan Africa are making quantum leaps in attracting all new mega LNG projects, Nigeria isn’t making much of an impact in future gas development; all announced projects are currently focusing on gas pipelines. Considering the length of time required to get from concept to development and first gas, I wonder if the current opportunity won’t elude Nigeria.
What are your expectations going into 2023 in terms of M&A activity in Nigeria’s downstream sector and its wider oil and gas industry?
With the announced exits from Nigeria by oil majors, there will be a lot of activity in the sector, but the ability of the domestic players to secure the requisite funding for both acquisitions and production development will be very challenging. I believe that the new NNPC Ltd. will definitely have an opportunity to grow their portfolio and become a dominant player.
What message would you send to the international investment community about BPCL’s ambitions and objectives in the years to come?
BPCL has planned for almost 700 hectares [7 square kilometres] of land to be designated as an oil and gas free zone with over 17 tcf [481.4 bcm] of gas access within its surrounding region. It will become the largest gas and petrochemical hub in sub-Saharan Africa. We may have our challenges today, but our future is solid.
Read our latest insights on:
Nigeria as a major maritime hubINTERVIEW
More content from Nigeria
Trinidad’s energy opportunitiesINTERVIEW
Latest news and features
Nigeria as a major maritime hubINTERVIEW
Steps to improve the maritime sectorINTERVIEW