The Rivers State Investment Promotion Agency (RSIPA) has disclosed details of a proposed $3.5 billion methanol and fertiliser plant in Bonny LGA that, if completed, will complement the state's existing market portfolio, including the Idorama Fertiliser Plant.
Methanol And Fertiliser Plant
The $3.5 billion methanol and fertiliser plant is a tripartite investment project between Rivers State Investment Promotion Agency (RSIPA), Best Options Chemical Ltd, China National Chemical Engineering Group Corporation (CNCECC), and community stakeholders.
The plant is a gas-based industrial project that uses natural gas as feedstock from abundant gas fields in oil–rich Rivers State to produce methanol and fertiliser, mainly for Nigeria’s industrial and agricultural sectors and various export destinations.
Bonny as Location of Choice
According to Chamberlain Peterside, RSIPA director, Bonny as Location of Choice was attributed to the area’s access to natural gas and proximity to the ocean, describing these enablers as important considerations in determining the proposed location.
The choice of Bonny as the preferred location for the multi-billion plant was reached after investors' assessment of several other locations, including the Orashi region, Omoku, and Onne, before settling on Bonny. “We conducted a site visit for them as part of efforts to identify a suitable location for the proposed facility,” Peterside stated.
RSIPA had facilitated engagements between the investors, relevant government ministries, prospective landowners, and host community stakeholders. RSIPA boss further clarified that the process pertains to land-related issues, location survey activities, consultations, and other relevant matters with state ministries on environmental assessment requirements.
He explained that the government’s role is to provide an enabling environment and guide the investors through the necessary engagement processes
Edward Li Guosong, the CNCECC director, further clarified the choice of Rivers State as his company’s preferred project destination, citing the abundant oil and gas resources as a deciding factor, among others that attracted the company to the project location.
Project Financing and Equity Investment
Best Options Chemical Ltd will sponsor the methanol and fertilizer project, as CNCECC is expected to provide 80 percent of the estimated $3.5 billion investment, while the Rivers State government is expected to facilitate the investment; “we have no direct equity stake in this project,” Peterside highlighted.
According to Frank Okafor, chief executive officer of Best Options Chemical Ltd, the 80% financial proposal of the project stands at US$2.8 billion, leaving the balance of 20% to other sources, which he did not disclose further on.
“This represents approximately US$2.8 billion, based on the projected investment value, leaving about $700 million to be sourced through other funding channels or financial arrangements,” Okafor said.
Project’s Final Investment Decision
The recently signed Memorandum of Understanding MoU between Rivers State Investment Promotion Agency (RSIPA) and Best Options Chemical Ltd, China National Chemical Engineering Group Corporation (CNCECC), according to Peterside, requires further arrangements, financing arrangements, regulatory approvals, and other necessary processes before a Final Investment Decision (FID) will be initiated.
RSIPA director warned that signing the project MoU should not be interpreted as confirmation to construct the project, stressing that “an MoU is only an initial step” towards realizing the proposed investment, as Nigerian National Petroleum Company (NNPC) Limited is also a participant in the proposed business arrangement.
When completed, the project will reposition Bonny as a major industrial investment hub, creating opportunities for employment, local businesses, skills development, and economic growth.
