KEY POINTS

• Nigeria has signed a deal to supply gas to a proposed $35 billion petrochemical plant.
• The project aims to boost Nigeria’s energy sector and create jobs.
• The plant will play a significant role in diversifying the country’s economy.

Nigeria has secured a major deal to provide gas to a planned $35bn petrochemical plant, a major boost to Nigeria’s energy industry.

This historic deal is expected to be a key part of Nigeria’s long-term plan to transform its economy and wean it off oil, as well as to provide employment for its burgeoning population.

The planned petrochemical facility, which will be one of the largest in Africa, is in line with the government’s strategic plan to harness the country’s abundant natural gas resources, the biggest in Africa.

This project is expected to revolutionize the energy sector and boost industrial development while improving the country’s standing in the global energy sector.

Promoting Nigeria’s energy industry

In a statement by the Nigerian government, the new deal will guarantee the supply of gas for the plant once the construction is done.

The gas will be utilized as feedstock in the manufacture of a number of petrochemical products which are essential inputs in various sectors including manufacturing, agriculture and construction.

The $35 billion petrochemical plant will help Nigeria to add value to its petrochemical products and also boost the country’s domestic production of petrochemical products instead of importing them.

This project will also assist the country to penetrate the international market of petrochemicals, which is expected to experience a continuous growth in the future.

According to Reuters, the Nigerian government is optimistic that this project will assist the country to fully exploit its gas resource which has in the past been under exploited.

At the moment, most of the natural gas produced in Nigeria is either burnt or exported, thus very little is used locally or for manufacturing purposes. This plant is set to alter that equation by offering a local market for the country’s produced gas.

Economic and employment generation effect

The construction of the petrochemical plant is likely to generate employment opportunities of thousands of people during construction and throughout the life cycle of the plant.

This comes at a time when Nigeria needs it most, especially with unemployment rate being high especially among the youths. Leaders believe that the project will create employment in construction, engineering, manufacturing industries, and other related industries.

Besides the provision of employment opportunities, others form of benefits that it is likely to provide to the government includes; Taxes, Royalties, and other income derivable from the plant. The Nigerian economy has experienced a number of problems in the recent past for example low revenues from exported crude oil.

Through diversification in to petrochemicals therefore Nigeria seeks to reduce its dependence on oil market so as to avoid being affected by fluctuating market trends.

Building the path to a sustainable tomorrow

The Nigeria’s push for the petrochemical plant is also in line with the country’s desire to transition to a more sustainable energy future.

The plant will still use fossil energy but the country is searching for cleaner technologies and energy conservation in line with the global trend of reducing carbon footprint.

Moreover, it opened possibility for development of the petrochemical industry that would decrease the problem of gas flaring in Nigeria’s oil and gas industry.

The petrochemical plant also provides a better way of dealing with the country’s gas resources by using the natural gas that would otherwise be flared.

Expectation for economic change

This particular gas supply deal is a major step towards the achievement of Nigeria’s economic transformation agenda.

However, there are still some problems, for instance, the problem of financing this project and the problem of infrastructure to support such a large scale project, the government of this country still believes that this project will be of long term benefits to the country.

As the country strengthens its portfolio for energy generation, the hope springs that Nigeria will grow to form part of the international petrochemical market. Such investments hold the prospect for the country to capitalize on the natural resource base for the benefit of future generations.