OCP Africa, a wholly owned subsidiary of the OCP Group, and the Nigeria Sovereign Investment Authority (NSIA) on March 2 inked a Shareholders Agreement for the creation of a joint venture company (JVC) that will oversee the development of an industrial platform to produce ammonia and fertilizers in Nigeria.
The OCP subsidiary also signed a Framework Agreement with Mobil Producing Nigeria (MPN), the Nigerian National Petroleum Corporation (NNPC), the Gas Aggregation Company Nigeria (GACN), and the NSIA on gas supply for the industrial platform.
The agreements were signed during a top-level Nigerian delegation to Morocco, chaired by Nigeria’s Minister of Petroleum Resources Timipre Marlin Sylva. The business visit ran March 1 to March 6, as part of the partnership between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry, OCP said in a statement.
A further Memorandum of Understanding (MOU) was inked on March 2 between OCP Africa and NSIA and the NNPC to evaluate the opportunity of an equity investment by NNPC in the JVC and for its support on gas. Additionally, an MOU Understanding was signed between OCP Africa, Nigeria’s Akwa Ibom State, and the NSIA on land acquisition for the new production facilities, administrative facilitation, and common agricultural development projects in Akwa Ibom State.
The goal of the project, which has been under discussion for some while, is to develop a multipurpose industrial platform in Nigeria, which will utilize Nigerian gas and Moroccan phosphate to produce 750,000 mt of ammonia under a first phase development and 1 million mt of phosphate fertilizers annually from 2025, said OCP in its statement.
The Moroccan group and NSIA back in June 2018 inked an MOU to develop an industrial platform in Nigeria for the production of ammonia and related products (GM June 15, 2018).
The NSIA, OCP, and NNPC will fund the $1.4 billion first phase of the project, according to an NSIA statement. The Nigerian investment body said the ammonia plant will have production capacity of 1.5 million mt/y to be built in two phases, with 70 percent of the output allocated for export to Morocco. The balance will be used in the production of 1 million mt/y of DAP and NPK fertilizers for supply to Nigeria’s domestic market.
OCP previously had said some of the ammonia output from the proposed plant would be exported to Morocco for the group’s own use (GM Jan. 18, 2019). OCP currently imports all its ammonia requirements, last year, importing just under 1.9 million mt, according to Trade Data Monitor.
A dedicated jetty to facilitate imports of raw materials from Morocco and other suppliers and to export excess ammonia and fertilizer to Morocco and potentially other regional markets will be built as part of the project, NSIA said.
According to the investment authority, project construction is expected to start no later than the third quarter of 2021, with a 2025 operations start date target.
The project “is structured to commercialize Nigeria’s vast natural gas resources and satisfy Morocco’s demand for cost-competitive ammonia,” said NSIA.
Morocco and Nigeria at the end of January this year renewed their commitment to joint efforts towards the realization of strategic development projects that included building an ammonia and fertilizer plant in Nigeria and a Nigeria-Morocco natural gas pipeline (GM Feb. 5, p. 1). Morocco’s King Mohammed VI and Nigerian President Muhammadu Buhari had agreed to speed up efforts to launch a fertilizers complex.
The newly signed agreements this week form part of the next steps following the success of the first phase of the Presidential Fertilizer Initiative (PFI) signed between Morocco and Nigeria in December 2016 and the progress of the fertilizer production plant project launched in June 2018 by OCP and the NSIA (GM June 15, 2018), OCP said in this week’s statement.
As part of these next steps, OCP Africa, the Fertilizer Producers & Suppliers Association of Nigeria (FEPSAN), and the NSIA have signed an MOU in order to commit to the second phase of the Nigerian PFI.
Back in 2016, OCP Group first partnered with the Fertilizer Producers & Suppliers Association of Nigeria (FESPAN) under the Presidential Fertilizer Initiative (PFI), supported by the NSIA (GM Dec. 6, 2016; May 19, 2017). This collaboration stretched across the entire agricultural value chain, from the introduction of customized fertilizers adapted to local soils and crops to improving the availability of fertilizers in the local market at competitive prices.
These investments have increased the local production capacity to more than 5 million mt/y, allowing Nigerian farmers better access to quality fertilizers, according to OCP.
In line with this, three blending facilities are currently under construction by the OCP group in Nigeria’s Kaduna, Ogun, and Sokoto states, due to start this year (GM March 18, 2019). Together, they will have total production capacity of 500,000 mt/y of fertilizers.