Monday, June 14, 2021
HomeEnergyAgreement signed for development of $1.4 billion fertiliser plant in Nigeria

Agreement signed for development of $1.4 billion fertiliser plant in Nigeria

THE Nigeria Sovereign Investment Authority (NSIA), OCP, the leading global provider of phosphate, and key operators in the oil and gas value chain have executed five crucial agreements at the Mohamed VI Polytechnic University (UM6P) in Benguerir, Morocco.

The agreements are designed to create a clear path for the second phase of the Presidential Fertiliser Initiative as well as the creation and operationalisation of a Multipurpose Industrial Platform (MPI) in Nigeria.

The parties to the agreement included the Nigerian National Petroleum Corporation (NNPC), Nigerian Content Development and Monitoring Board (NCDMB), GACN (Gas Aggregation Company Nigeria Limited), Akwa Ibom State Government, the Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN) and Mobil Producing Nigeria (MPN).

Principally, five agreements were executed as follows:

  • A Memorandum of Understanding (MOU) between Nigeria Sovereign Investment Authority (NSIA), OCP Africa and the Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN) to commit to the second phase of the Nigerian Presidential Fertilizer Initiative (PFI II).
  • A Shareholders Agreement (SHA) between the NSIA and OCP Africa for the creation of the Joint Venture Company (JVC) which will oversee the development of an industrial platform that will produce ammonia and fertilisers in Nigeria.
  • A MOU between NSIA, OCP Africa and the Akwa Ibom State in Nigeria on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.
  • A MOU between NSIA, OCP Africa, and the Nigerian National Petroleum Corporation (NNPC), to evaluate the opportunity of an equity investment by the NNPC in the JVC and for its support on gas.
  • A Framework Agreement between NSIA, OCP Africa, Mobil Producing Nigeria (MPN), the NNPC and the Gas Aggregation Company Nigeria (GACN) on gas supply for the MPI.

The first two agreements relate to the second phase of the Presidential Fertiliser Initiative (PFI II) while the last three contracts underpin the creation of a Multipurpose Industrial Platform (MPI) to be sited in Akwa Ibom State.

The agreements on the second phase of the PFI give effect to the presidential directive which has restructured the PFI programme. Under the revised structure, NSIA’s role moves upstream, thereby limiting its involvement to bulk importation of raw materials on behalf of the fertiliser blenders, with bank guarantees provided by the blenders. This approach will make the programme more sustainable, strengthen the productive capacity of the blending plants and eliminate financial risk to the NSIA.

On the MPI project, three agreements were signed. The first is for land acquisition, the second for equity investment in the joint venture company to operate the MPI and the last for gas supply to the project.

The first phase of the MPI Project will produce 1.5 million tonnes per year (tpy) of ammonia in two phases. Up to 70 percent of the ammonia produced will be allocated for export to Morocco and the balance will be routed to the production of 1 million tpy of diammonium phosphate (DAP) and NPK fertilisers to feed domestic demand. It is expected that project construction will commence no later than the third quarter of 2021. In the first phase of the project, $1.4bn will be invested in building out the plant and its supporting infrastructure with a target operations-commencement date of 2025.

The project will be sited in Akwa Ibom State in a gas-rich location. Factors such as land availability and accessibility, gas adequacy, sufficiency of marine draft and other environmental and social considerations informed the decision to site the plant in Akwa Ibom.

At completion, the integrated ammonia and fertiliser plant will house – within its battery limits – the process plants for ammonia and fertilizer production, administrative buildings, fertiliser bagging units, water purification units, storage for raw materials and finished goods, onsite power plant and other ancillary facilities.

The plant will have a dedicated jetty to facilitate seamless importation of raw materials from Morocco and other suppliers and export of excess ammonia and fertiliser to Morocco and potentially other regional markets.

 

 

 

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