Nigeria’s Pipe Coatings Market is Poised to Grow

Nigeria’s growing oil and gas industry continues to attract public and private sector investments, not only in the upstream segment but also midstream. This is especially true for the construction and maintenance of a wide network of onshore and offshore pipelines.

This is leading to an increase in demand for high-performance protective pipe coatings.

Nigerian-based Monarch Alloys Ltd. has recently set up a pipe coating facility with a capacity of two million square meters per year, becoming the latest company to venture into Nigeria’s pipe coatings market, which has attracted a mix of domestic and international industry players.

The plant, which has an annual internal coating capacity of one million square meters and can close up to 500 pipes per day, “deploys external coating like fusion bonded epoxy, dual layer FBE, 3 LPE, 3 LPP and polyurethane to prevent corrosion, and liquid epoxy solvent base and solvent free internal coating to improve product flow,” according to Monarch.

The facility, which also has capacity for concrete weight coating, was unveiled by officials from the Content Development and Monitoring Board (NCDMB), a federal government agency, pushing a notch higher Nigeria’s capability to “provide advanced pipeline infrastructure which is designed, built and completed in Nigeria,” according to Felix Ogbe, the executive secretary of NCDMB.

Ogbe was quoted as saying the new pipe coating plant would help Nigeria reduce its import bill on coated pipes and enhance growth of the oil and gas industry’s value addition levels.

Crude Oil Production in Nigeria

During the unveiling of the plant, Heineken Lokpobiri, Nigeria’s petroleum minister, attributed Nigeria’s dwindling crude oil production to poor pipeline infrastructure, saying some portions of the pipeline network are more than
60 years old.

Despite the challenges facing Nigeria’s oil and gas industry, such as the aging pipeline infrastructure, the country, which is Africa’s largest producer of crude oil, has more than $13.5 billion upstream oil and gas projects that have reached final investment decision (FID).

Many of these projects are promoted by international oil majors, and are expected to trigger substantial investment, especially in the transportation of crude oil and natural gas.

Some reports indicate Nigeria accounts for three in every four projects globally that have reached FID phase, including Shell Plc’s $122 million Iseni Gas Project, TotalEnergies’ $566 million Ubeta Gas Project, and the Bonga North Tranche 1 project recently given a nod by Shell Plc.

Although these projects open opportunities for the supply of high-performance coatings and linings, as well as fireproofing products, both at the offshore and onshore sites, they will also have a huge impact on the construction and maintenance of pipelines for safe and efficient transportation and distribution of produced and refined crude oil and natural gas.

According to Canada’s Trade Commissioner’s office, Nigeria’s “planned increase in the exploitation of gas resources and detailed engineering services will be required for the construction of gas processing plants and new pipelines.”

The Nigerian Upstream Petroleum Regulatory Commission says more than 10,000km of pipelines have been approved for efficient delivery of gas from the licensed oil and gas assets in Nigeria, even as the country is hoping to attract more investments “in the area of provision and operation of more pipelines for the delivery of natural gas in the
domestic market.

“The licensed capacities for this critical segment of the domestic market have continued to grow progressively in the last decade and will expand greatly in this decade of gas,” the commission said in a recent report.

Some of the projects include the Ajaokuta-Kaduna-Kano Gas Pipeline, which the government of Nigeria said will integrate the country’s northern region into the existing 4,500km national gas network.

State-owned Nigerian National Petroleum Corporation Ltd (NNPC) is also constructing the Obiafu-Obrikom-Oben (OB3) gas transmission pipeline, which the company said is the inter-connector “which links the Eastern gas pipeline network to the Escravos-Lagos Pipeline System in the West and the Ajaokuta-Kaduna-Kano Pipeline in the North.” The pipeline, when completed, would bring into Nigeria’s gas transportation network approximately 2.2 billion standard cubic feet of gas.

Furthermore, Nigeria is a shareholder, through NNPC, in West African Gas Pipeline Company Ltd, a joint venture between public and private sector companies from Benin, Ghana, Nigeria and Togo. This JV owns and operates the 678km West African Gas Pipeline (WAGP). 

During the construction of WAGP, Bredero Shaw Pipecoaters Ltd, then a subsidiary of ShawCor Ltd., which formerly was the world’s biggest pipeline coatings manufacturer, was contracted to supply concrete weight coating for the pipeline, which transports natural gas from Nigeria to Togo and Ghana under a $35 million contract.

Other pipeline coating market players that are taking advantage of this growth in Nigeria’s oil and gas industry include Pipe Coaters Nigeria (PCN), a pipe coating facility located in the Onne Oil & Gas Free Zone.

The company supplies a wide variety of products and services for the oil and gas industry, such as internal, anticorrosion, concrete and thermal insulation coatings for onshore and offshore applications, according to company information.

PCN is 40% owned by Tenaris, a leading global supplier of steel tubes and related services for the energy industry.

At the Onne facility, PCN produces premium joints and couplings, which comprises a threading facility for both API and premium connections. It has an annual production capacity of 40,000 tons.

Tenaris had previously announced the completion of its acquisition of Mattr’s pipe coating business unit, Shawcor, for $182.6 million, leading to the establishment of TenarisShawcor. The company said this “will provide greater capabilities and specialization in end-to-end concrete weight, anti-corrosion, and flow assurance coating solutions for onshore and offshore pipelines.”

It said the integration added nine coating plants in Canada, Mexico, Norway, Indonesia, the UAE, and the United States to Tenaris’s footprint, and that the company “maintains its previous coating operations in Argentina, Brazil, Italy, Nigeria, and the United States.”

Other notable pipeline coating market players in Nigeria include Solewant Group, which has a plant at Port Harcourt in River State and other smaller players working as sub-contractors in some of the larger projects.

With the promulgation of Nigeria’s Petroleum Industry Act (PIA) in 2021, the West African country, which hosts Africa’s largest proven natural gas reserves, has not only succeeded in endearing itself to both domestic and international energy sector affluent investors, but has provided a conducive business environment for the pipeline coatings market to thrive.