AFC Backs Africa's Largest Methanol Facility, Converting Flared Gas into Valuable Resources

The initiative in Akwa Ibom, Nigeria, aims to produce an initial capacity of 1.8 million tonnes per annum (MTPA) of methanol, thereby diversifying the regional economy and creating more than 18,000 employment opportunities.

Located in Akwa Ibom, Nigeria, the project aims to produce an initial capacity of 1.8 million tonnes per annum (MTPA) of methanol, thereby diversifying the local economy and creating over 18,000 jobs. AFC has pledged development stage financing to mitigate risks associated with the project and facilitate its financial closure, in addition to offering financial advisory services to the sponsors for securing the necessary project financing and ensuring the successful execution of this transformative initiative. The project is spearheaded by Blackrose, a firm specializing in project development and investment, in collaboration with the International Finance Corporation (IFC), the private sector division of the World Bank Group, which is co-financing the venture alongside AFC.

Nigeria's vast natural gas reserves, totaling 200 cubic feet and the largest in Africa, represent a significant opportunity for enhancing the country's resource utilization and improving climate resilience, as one-third of the continent's total reserves remain untapped. Gas flaring has posed a serious threat to local communities since the onset of oil production, releasing harmful chemicals associated with respiratory and other health problems.

“This innovative project is transforming an immense negative for Nigerians into a very significant positive by harnessing this country’s abundant gas reserves as a unique opportunity to become a global leader in low-carbon manufacturing and energy systems,” said Samaila Zubairu, President and CEO of AFC. “This strategic collaboration with Blackrose and IFC underscores our dedication to supporting Africa’s pragmatic transition to net zero, emphasising rapid industrialisation, local job creation, and socio-economic advancement through the production of methanol, a versatile and low-carbon industrial feedstock.”

The project will be executed in two distinct phases, each designed to achieve an installed capacity of 1.8 MTPA. The first phase will focus on the production of low-carbon methanol, a vital industrial chemical used in the creation of numerous everyday items, such as solvents for the pharmaceutical sector, paints, plastics, automotive components, and construction materials. This methanol also serves as a lower-emission alternative fuel for hard-to-decarbonize industries, including shipping and industrial boilers, and has applications in cooking stoves and fuel cell technologies. The second phase will enhance methanol production by incorporating ammonia, which is a key ingredient in fertilizer manufacturing.

Methanol production will utilize synthetic gas primarily derived from coal and natural gas. By employing state-of-the-art energy-efficient production techniques, the facility aims to achieve significantly lower net carbon intensity compared to conventional methanol synthesis methods, while also minimizing CO2 emissions by converting gas that would otherwise be flared. Furthermore, the project includes initiatives for carbon capture and offset strategies, as well as the integration of external hydrogen to further approach carbon neutrality.

Upon becoming operational, the gas-to-methanol facility is projected to create over 2,500 local jobs during the construction phase, along with an additional 16,000 indirect jobs by stimulating manufacturing activities and promoting economic diversification.