Techno-Economic Assessment of Midstream Propane as a Petrochemical Feedstock in Nigeria

Abstract Propane is a crucial component in Liquefied Petroleum Gas (LPG) and a valuable feedstock for petrochemical production. In Nigeria, safety concerns tied to high vapor pressure limit propane usage in LPG to about 30%, resulting in surplus propane at gas processing facilities. The country's extensive gas reserves, government incentives for gas development, and expanding midstream infrastructure create a prime opportunity to redirect this surplus into higher-value petrochemical derivatives. This study examines the techno-economic feasibility of converting propane into polyols—vital intermediates for polyurethane production—by employing propane dehydrogenation and propylene oxide synthesis. Key economic metrics, including Return on Investment (ROI), Internal Rate of Return (IRR), Net Present Value (NPV), and payback period, are used to assess financial viability across different market scenarios. Preliminary findings suggest strong potential for import substitution, job creation, and export growth in polyurethane-related sectors. The study concludes that policy support, strategic infrastructure development, and collaborative efforts among government, industry, and investors are essential for unlocking propane-based polyol production's substantial economic and industrial advantages in Nigeria. Insights from this research could help upstream producers and processing operators add value to midstream propane, thereby boosting their revenues.