STRATEGY FOR THE DEVELOPMENT
OF THE PETROCHEMICALS INDUSTRY
IN NIGERIA
BY
Professor Abiola Kehinde
Chemical Engineering Department
University of Lagos.
INTRODUCTION
The petrochemical market is the foundation of many chemicals industry, as it
provides the building blocks for most chemical products. For instance, Olefins.
(ethylene, propylene, butadiene) and aromatics (benzene, toluene, xylene) are
used in end-user markets such as paints, plastics, explosives and fertilizers. In a
recent survey and analysis on the importance of refinery capacity to petrochemical
markets
in
Nigeria
and
South
Africa
by
Frost
&
Sullivan
(www.chemicals.frost.com), strategic analysis of the South African and Nigerian
petrochemicals markets, found that the Nigerian petrochemicals markets
(excluding export of crude oil) was worth $14.03 billion in 2008 and forecasts it to
reach $29.7 billion by 2015. South Africa’s petrochemicals market was worth
$18.37 billion in 2008 and Frost & Sullivan forecasts it to increase to $24.5 billion
by 2015.
The demand for petrochemicals products is highly driven by activities in the enduser segments, which include well developed manufacturing sector, that provides
a ready market for end-products of the petrochemicals industry.
South Africa’s petrochemicals market is more developed than other sub-saharan
markets, with the capacities of the local refineries exceeding domestic demand.
South Africa refineries operate at optimum capacity and this enables the country to
export to other countries in the region. The South African market is unique
because of the production of petrochemicals from coal and gas feedstock using
coal-to-liquid (CTL) and gas-to-liquid (GTL) technologies.
On the other hand, Nigeria depends on imports of petrochemical products, despite
the presence of large crude reserves. This is attributed to the country’s low
refinery-capacity utilization (approximately 40% of the full capacity), which
results in lower petrochemical yields, creating a need for imports.
A restructuring of the operation of Nigerian refineries, with greater private sector
participation, is likely to increase the capacity utilization of the refineries. Once
this is instituted, the cost structure of the Nigerian petrochemicals market is set to
improve crude is the main feedstock for the production of Olefins and aromatics in
Nigeria and South Africa. Although Nigeria has an abundance of crude oil
deposits, the cost of production of petrochemicals is high. This is due to issues
such as disruptions in supply of crude to the refineries due to militants’ activity,
general corruption in the country and inefficiency in the way refineries operate.
Steps by the Nigerian Government to increase the benefits derived by communities
in the oil regions are expected to bring stability and minimize disruptions.
The objective of this presentation is as follows:
i.
Structure of the petrochemical industry.
ii.
Describe the product profile of the petrochemical industry
iii.
Describe the requirements of appropriate processing technologies for the
petrochemical industry.
iv.
Suggest appropriate strategy for the development of the petrochemical
industry in Nigeria.
THE NIGERIAN PETROCHEMICAL INDUSTRY
The Nigerian Petrochemical industry is run by the Federal government of Nigeria
through the Nigerian National Petroleum Corporation (NNPC). The NNPC
operates four crude oil refineries: Port-Harcourt Refinery I 60,000 bpd
Port-Harcourt Refinery II: 150,000 bpd
Kaduna refining and Petrochemical Co: 100,000 bpd
Warri Refining and Petrochemical Co: 110,000 bpd
These refineries are expected to process about 420,000 barrels per day of crude oil,
unfortunately the present total refining capacity is about 148,300 bpd (35.3%) of
installed capacity.
The low refining capacity of the refining and petrochemical plants has affected the
production of petrochemical products from the plants.
Warri Refining and Petrochemical co (KRPC_ designed to produce Carbon Black.
Kaduna Refining and Petrochemical co. (KPRC) was designed to produce Linear
Alkyl Benzene (LAB) to be used in the manufacture of detergents. Therefore, the
low crude oil refining capacity has affected negatively the production of
petrochemical products.
The NNPC also have a full fledge Petrochemical Company – Eleme Petrochemical
Company Ltd. (EPCL). The EPCL was designed to produce the following
petrochemical products: such as polytheylene, polypropylene and polyvinyl
chloride in the first phase of the plant.
Private initiatives in establishment of petrochemical plants in Nigeria include:
i.
Chevron Nig. Ltd with a Gas-to-liquid GTL plant in Escravos.
ii.
Viva Methanol in Lekki (Lagos) Export Free Zone.
iii.
Axinova Polyolefins.
STRUCTURE OF THE PETROCHEMICAL INDUSTRY
The Petrochemical complex involves the manufacture of a combination of the
following products:

The manufacture of basic raw materials like syn gas, methane, ethylene,
propylene, acetylene, butadiene, benzene, toluene, xylenes, etc.

Manufacture of intermediate chemicals derived from the above listed basic
chemicals by various unit processes like oxidation, hydrogenation
chlorination, nitration, alkylation, dehydrogenation along with various unit
operations like distillation, absorption, extraction, adsorption etc.

Manufacture of target chemicals and polymers that may be used in the
manufacture of target products and chemicals to meet consumer needs such
as plastics, synthetic fibres, synthetic rubber, detergents, explosives, dyes,
intermediate and pesticides.
The structure of petrochemical complexes and products derived from various
petrochemicals are shown in Figure 1, (1.2). Figure 2 (1.3) illustrates the overall
view of a petrochemical complex starting from the production of synthesis gas,
olefins, aromatics to the manufacture of intermediates and finished products like
plastic, synthetic fibre, synthetic rubber, etc.
Figure 3 (1.4) shows the basic building blocks and the petroleum – petrochemical
interface. Petroleum and petrochemical industries have close links and have always
benefited from their symbiotic relationship, where any variation in the cost of
crude oil and petroleum products will have a direct impact on the overall economy
of petrochemicals.
In the changing scenario, petroleum refining and petrochemical production
integration is of vital importance for maximizing the use of byproducts and
improving the overall economy of a petroleum refinery.
FEEDSTOCK AND PRODUCT PROFILE OF THE PETROCHEMICAL
INDUSTRY
One of the major issues responsible for the worldwide growth of
petrochemical industry has been the availability of feedstock, which has led to
replacement of the natural resources such as coal, molasses, fats, etc. Basic
feedstock used in the petrochemicals industry for manufacture of olefins and
aromatics are derived either from natural gas or crude oil petroleum fractions.
These include natural gas (associated and non-associated), condensate, naphta,
kerosene, catalytic cracking and reformer gases, waxes, pyrolysis gasoline.
Summary of the feedstock, their source and process technology involved is
presented in Table 1 (Table 1.4) and Table 2 (Table 1.13). Petrochemical products
derived from natural gas are shown in Figure 4 (Figure 1.15)
Nigeria currently has proven Crude oil reserves of 37.2 billion barrels, this is
expected to increase to increase to 40.0 billion barrels in 2015. Crude oil
production is between 2.1 and 2.5 million barrels per day. Nigeria is the highest
crude oil producer in Africa and the 11th highest producer in the world.
Nigeria has a proven reserve of 185 trillion cu. Ft of Natural Gas, and currently up
to 35% of Associate Natural Gas produced is flared. The flared Natural Gas is a
potential feedstock for the petrochemical industry.
FEEDSTOCKS AND TECHNOLOGY
Several processes, both thermal and catalytic occur in the conversion of
feedstocks and intermediate products. These processes are listed in Figure 1 and 4.
(Mall 1994).
Few years back, naphta was the dominant feedstock for petrochemicals; however,
recent trends have been for more utilization of Natural Gas, Liquefied Petroleum
Gas (LPG) and Pyrolysis Gasoline.
Many Licensor companies offer their technologies for the production of
petrochemical products from variety of feedstocks. Some of the licensor companies
include:
Table 3:
Process Technology – Licensors (McGraw-Hill, 1983)
Ammonia: M.W. Kellog Co.
Aromatics from Hydrocarbon Mixtures: UOP
Benzene: Air Products and Chemicals (Houdry Division)
Butylenes (Acetylene-Free): Atlantic Richfield Co. (ARCO) and Engelhard
Carbon Black: Phillips Petroleum
Chlorine/ Sodium Hydroxide: Occidental Chemical Corp.
Hooker Industrial & Specialty Chemicals
Ethanol: Huels
Ethylbeuzene: UOP Process Division
Ethylene/ Propylene: C-E Lummus Div. of Combustion Engineering
Ethylene Glycols: Shell Development Co.
Ethylene Oxide: Shell Development Co.
Linear Alkyl Benzene: ARCO
Methanol: ICI
Nitric Acid: Stamicarbon
Nylon 6: Zimmer
Cis-Polybutadiene: Phillips Petroleum Co.
Polybutene: Cosden Technology Inc.
Polyethylene (High Density): Phillips Petroleum Co.
Polyethylene Terephthalate: Zimmer
Polypropylene: Hercules
Polystyrene: Cosden Technology Inc.
Polyvinyl Chloride: Mitsui Toatsu Chemicals Inc.
Styrene: Monsato and C-E Lummus
Styrene-Butadiene Rubber: Phillips Petroleum Co.
Urea from Ammonia and Carbon Dioxide: Stamicarbon B.V.
Vinyl Chloride: Stauffer Chemicals
Xylenes: Atlantic Richfield Co. (ARCO)
STRATEGY FOR THE DEVELOPMENT OF THE PETROCHEMICAL
INDUSTRY IN NIGERIA
Many factors have been identified as being critical in the establishment and
operation of petrochemical industry.
The factors include:
i.
Availability of feedstocks such as crude oil and natural gas.
ii.
Crude oil refining capacity for the production of petrochemical feedstock
and intermediates.
iii.
Well developed manufacturing sector to serve as market for petrochemical
products.
iv.
Market for manufactured goods from petrochemical products.
v.
Availability of appropriate processing technology.
vi.
Financing of capital-intensive projects.
A quick SWOT analysis of some petrochemical projects will show that there are
good prospects in the establishment of petrochemical projects in Nigeria.
SWOT (Strengths, Weakness, Opportunities, Threats)
Strengths:
 Availability of feedstocks such as crude oil and natural gas.
 Existing Refining capacity.
 Sizeable market for finished products.
Weakness:
 Rather weak manufacturing sector.
 Low level of infrastructure (especially in power supply).
 Low level of available appropriate technology.
Opportunities:
 Diversification of the Nigerian economy.
 Opportunity to save foreign exchange.
 Opportunity to acquire modern technology and know-how.
 Job opportunities as on the average, there are 7 additional jobs outside due to
downstream activities.
Threats:
 Financing of capital intensive projects.
 National security issues.
RECOMMENDATIONS
The areas of Weakness and Threats should be addressed seriously.
1. The issue of weak manufacturing sector is tied partially to the low level of
available infrastructure especially in the transportation of finished products.
2. Low level of appropriate technology calls for a national strategic approach to
technology acquisition.
3. Issues concerning national security will discourage foreign investments and
joint ventures opportunities.
4. Financing of capital intensive projects could be undertaken by getting
members of industry sectorial groups to mobilize funds for projects relating
to production of petrochemical products used by the group.
For example, members of Agricultural and Agro-processing Group can
mobilize funds for the kick off of the establishment of Ammonia plant.
This is an idea that the Manufacturers Association of Nigeria (MAN) can
develop for implementation.
The same goes for the paints, packaging, pharmaceuticals, textile, minerals
etc. Groups companies that are currently involved in the importation of fuel
products should be encouraged to mobilize funds for the rehabilitation of the
existing refineries.
REFERENCES
Mall, I.D.(1994) Indian Petrochemicals – An Overview Chemical Engineering
World . p101
Mall, I.D.(2007) Petrochemical Process Technology
Macmillan India Ltd, Delhi, India.
McGraw-Hill Publications Co. (1983) Sources and Production Economics of
Chemical Products.
3 Edition. McGraw-Hill Publications, New York, NY.