Nigerian National Petroleum Corporation (NNPC) is to build a $3bn methanol plant on Brass Island in the Niger Delta to produce up to 10,000 tonnes of methanol a day from gas supplied by energy company Shell.

Timipre Sylva, Nigeria’s oil minister,  local media that the project would end Nigeria’s dependence on imported methanol and create 30,000 direct and indirect jobs during construction.

Methanol, or wood alcohol, is used as a precursor in the production of many commodity chemicals, as well as fuels, solvents and antifreeze.

Malam Mele Kyari, the managing director of NNPC, said the decision to build the plant was one of the most important investments made by his company in the past five years.

A final investment decision was  over the weekend by the NNPC, DSV Engineering and the Nigerian Content Development and Monitoring Board, a state agency set up to ensure Nigerian involvement in oil and gas projects.

Some 70% of funding from the scheme is to come from international lenders, including the China Export-Import Bank, the African Development Bank and international commercial banks.

The methanol produced at the Brass plant will be  by BP Oil International under a $6bn, 10-year “offtake” deal signed in 2017 with the Brass Fertilizer & Petrochemical Company, the entity set up to operate the plant.

Construction of the plant is expected to be completed by 2024.