• Saturday, May 25, 2024
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BusinessDay

Diversifying our resource base(oil & gas) for petrochemicals exports

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Sunny Nwachukwu

The attractions and benefits of diverse base aromatics production in petrochemicals enhance product portfolio changes. New technologies and catalysts enable aromatics to be produced from local feedstock such as Liquefied Petroleum Gas (LPG i.e. C3 gas or Propane & C4 gas or Butane) and condensates in place of traditional feedstock such as aromatic naphtha. Due to feedstock availability, i.e. surplus LPG and field condensates becoming available for processing into aromatics, improved production of aromatics needs more emphasis by the FG than exporting LPG and condensates. Good enough, the Minister of Petroleum Resources, Dr. Rilwan Lukman has stressed that there is need to first of all satisfy and saturate the domestic demands for gas supplies. It is therefore instructive that all LNG projects and the Bonny LNG plant would strategize a method in addition to its present operations, provide adequate quantities of feedstock (for instance C2 gas or its olefinic derivative, ethylene) for netback that yields better value addition as petrochemicals. An example is the local production of aromatic derivate, styrene(ethenylbenzene) used for polystyrene and copolymers like films, molded articles, synthetic rubbers, adhesives. It is also worthy of note(economic wise) that trading on aromatics intermediates (like styrene) in the international market are less expensive petrochemicals to ship relative to liquefied gases(like ethylene) and plastic resins.

Read Also: Downturn in the Nigerian Petroleum Industry: Considerations for ameliorating fiscal burden

Today, with the expected successful completion of the ongoing integrated power projects(IPPs) by the FG & all stakeholders for the timely realization of the proposed targeted feat in terms of power generation, transmission and distribution nationwide; industries in the country would be revived back to operate at full capacities. The comatose refineries(with total daily output of about 18.4 million liters PMS) could power/drive economic & commercial activities to a great extent through enhanced transportation services by provision of fuels.
No doubt, Nigeria energy sector could create a great investment opportunity if, the Niger Delta crisis is permanently resolved. Security of life & properties pose very serious challenge against rise in investment in the energy sector due to kidnappings, hostage taking and pipeline vandalism by the militants in the Niger Delta region. The effect clearly manifests in the relocations of the International Oil Companies (IOCs) to Angola presently. Despite this nagging impediment (there is hope in the nearest future with the FG’s recent pronouncement for amnesty) Nigeria could be a country with immense potential for petrochemical development.

Our natural gas resources and population size of about 150 million people makes us a promising country for investment in ethylene and derivatives capacity, just like Iran in the Middle East when Medium to Long term investment trend is being considered in that sector of our economy. Take for instance, Iran takes five out of ten ethylene cracker projects for the Middle East with her enormous amount of gas it holds in the South Pars field along the Persian Gulf. Similarly, Western companies would have been evaluating 50/50 joint ventures(JVs) with NNPC in olefins production based on the attractions on ground, i.e. the availability of the inexpensive ethane feedstock. The Russian President’s visit on the 24th June, 2009 for a proposed gas project that runs in billions of Dollars on behalf of Russia’s Gazprom is indicative of such tendencies for attractions on foreign investors in the sector. The same way, the Spanish Prime Minister came and signed bilateral agreement on Energy, Oil & Gas.
On energy, the present global dependence on oil & gas(fossil fuels) for energy needs will remain a determining factor in the future global energy equation because, head or tail, there is no alternative to fossil fuels yet, whenever the future of energy is considered. The truth of the matter is that most renewable sources of energy will continue to play a complementary role to conventional fuels in meeting the world’s energy demands though, with serious caution when the greenhouse gas emissions menace is considered because; presently the entire world dare desires low-carbon, cleaner & cheap energy sources, as measures to combat climate change.
With the fact that renewable resources can be defined as diffused energy, while fossil fuels are characterized by a larger concentration of chemical energy. It follows that the cost of harnessing renewable energy sources will continue to be higher in the foreseeable future, except maybe in times of crisis(like the present situation in the Niger Delta region) when access to conventional resources is threatened. Even with the institution of tax policies by the FG favoring renewable sources, the high cost factor coupled with a lack of technological innovation means it will be a long time before we can make a switch to more eco-friendly fuels such as solar and wind power.