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Petroleum industry Nigerian Content initiative: Catalysis as a Key Requirement for Sustainable Petrochemicals Industry By Baba El-Yakubu
Nigeria has achieved notoriety in the world petroleum business. Although its total oil production output is only an average of 2.5 million barrel per day; agitations for local participation and environmental concerns in its oil producing areas often adversely affects the global oil and gas markets. This is not its only unsavory reputation. Among all OPEC members, Nigeria is perhaps the only country that relies so heavily on foreign firms for services in its petroleum industry. Crude oil refining is its main downstream operation. Yet, it imports at least 43% of its gasoline needs. There are low petrochemicals production due to low capacity utilizations and unavailability of the requisite technology. Again, importation is necessary to meet the rather stunted domestic petrochemicals demands. Nigeria is among the worst gas flaring nations. Up till 2001, 51% of the gas produced was flared. The reliance on the foreign workforces for services and productions of gasoline/chemicals, the obvious environmental and economic implications of gas flaring bring into question the long term sustainability of the country's petroleum and petrochemical industry.
For Nigeria to correct this anomaly, derive more benefits from its oil and gas resources and calm down local agitations, the federal government launched what is called Nigerian content. It is coordinated by a division of NNPC established in 2005. Nigerian Content is defined as “the quantum of composite value added or created in the Nigerian economy through the utilization of Nigerian human and material resources for the provision of goods and services to the petroleum industry within acceptable standards in order to stimulate the development of indigenous capabilities”. It hopes to achieve local content of 45 and 70% by 2006 and 2010 respectively. The main motivation is to transform the oil and gas industry into the economic engine for job creation and national growth by developing in-country capacity and indigenous capabilities. Specific objectives are to promote: (i) a framework that guarantees active participation of Nigerians in oil and gas activities, (ii) value addition in Nigeria by utilization of local raw materials and human resources for manufacturing of goods and provision of services to the Petroleum industry and (iii) steady, measurable and sustainable growth of Nigerian Content. The main thrust of the initiative is to supply value added oil and gas products to both local and international markets. This will engender industrial growth and generate employment in the country.
One way to add value is to produce petrochemicals that are in increasing demands in the international markets. Such chemicals are produced using raw materials that are derived from crude oil and natural gas. For instance, about 10% of refinery fossil feedstock ends up in petrochemicals. They are essential to modern prosperous way of life. The chemicals are used in the agricultural industry as fertilizers, insecticides, pesticides, soil conditioners, products preservatives, packaging materials, etc. Some of their uses in foods and feeds sector are as additives, preservatives and binders. Fine chemicals are used in the pharmaceutical industry to produce a variety of therapeutical and nutriceutical products. Others are used in materials, ceramic, polymer and detergents manufacturing. Nigeria is strategically located to exploit its petroleum resources and supply petrochemicals for both internal and external markets. The whole Africa is a vast market for Nigeria. With a possibility of trans-Sahara gas pipeline, petrochemical plants could be built jointly with other stakeholders to supply products to North African, Mediterranean and European countries. Similarly, the West Africa Gas Pipeline company could be expanded to supply additional gas for petrochemicals productions to serve West African and even South American market across the Atlantic. As other oil producing countries already started, Nigeria may consider building plants in China and India to export crude oil, process it and supply the value-added products to the growing demands there. The availability of these products has positive spiral effects on the economy.
However, it needs to be pointed out that petrochemical industry is raw material and technology driven. Therefore, in order to be active participant rather than passive observer in the world petrochemical scene, Nigerian content initiative needs to do something else first. Nigerian content must initiate policies to acquire key know-how and best practices to optimally convert the abundant raw materials to desired products. One important field of knowledge that is necessary for petrochemicals production is catalysis. It is a chemical science that deals with design of materials (or catalysts) that increase the speed of chemical conversions and direct the course of the conversions to certain desired products. It is important because more than 80% of chemicals require the use of catalysts at some stage of their productions. The simple consequence of the use of catalyst is the ability to do more in less time and produce more of certain product from the starting material. Thus, it could be used for sustainable processes that minimize waste (materials and energy) and protect environment. It is a key to Nigeria's attempt to have local content in it is hydrocarbon products and services. At present, Nigeria has refining and petrochemical processes manpower that possess rudimentary or no knowledge of the important science and application of catalysis. There are neither significant academic institutions that develop it nor government departments that promote it. Is there anything else that needs more indigenous participation?
Every year tons of different types of catalysts worth millions of dollars are imported for the existing refining and petrochemicals processes. For instance, at 400,000 barrel per day crude oil processing capacity, over 500,000 tons of zeolite catalysts are imported annually at a cost of about five billion naira. Therefore, for sustainable petrochemicals processes, Nigerian workers need better understandings and knowledge on how to (i) handle a catalyst to sustain its efficacy, (ii) regenerate it after deactivation (iii) manufacture it to substitute import, (iv) design better ones to improve existing processes and (v) design new ones for new processes. If necessary policy initiatives are put in place, Nigeria could achieve items (i) – (iii) in 2-5 years and (iv) and (v) 5-10 years. Catalysis is still at its infancy. Therefore, the entry barrier is low. Basic research facilities could be established. Collaboration could be sought with more advanced groups elsewhere for analyses and other aspects that may be difficult to do locally. It is as simple as this. Other developing countries have been putting things in place to develop local capacity in catalytic sciences. For instance, back in 1994, researchers in Saudi Arabia were able to develop a catalyst locally. After further improvement, today there is a new chemical plant producing chemicals based on the catalyst.
Nigerian content policy has come at a right time. It needs to widen its scope to include the petrochemical industry. This will make it possible for the country to change from raw materials to value-added products supplier. This will have spiral effects by generating employment, developing other industries and engendering sustainable national economic development. Petrochemical industry is driven by the availability of raw materials, necessary technology and competent manpower. A key technology for petrochemical industry is efficient manufacture of catalysts that are known to speedup the petrochemical productions. The fact that more than 80% of chemicals require the use of catalysts at some stage of their production makes it both necessary and important to pay special attention to the science and technology of catalysis. In a short term, Nigerian content should include training and capacity building toward efficient operation of catalytic processes. Centers of excellence may be developed for long term self-reliance in catalysts manufacture, research and development. This will make it possible for Nigeria to have sustainable supply of value-added petroleum-based chemicals for both local and international markets.
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