The venture, which is backed by the US Overseas Private Investment Corporation (OPIC), is part of the Obama administration's efforts to enhance Africa's private sector.
The Edo State's Greenpark nitrogen fertiliser project is a re-engineered ammonia/urea plant from Kenai, Alaska, that has been out of operation since 2007.
"It is going to use gas captured from a gas field nearby, thereby helping with greenhouse gas emissions," said US State Department spokeswoman Victoria Nuland.
"And it’s going to provide a reliable and secure source of low-cost fertiliser and nearly a 1,000 construction jobs and projects around the area, 500 of them direct and the rest around the country."
Natural gas is the primary feedstock for nitrogen fertiliser and can account for up to 95 per cent of total production costs. With 36 MMBTU of natural gas needed for each metric tonne of ammonia, commercially sustainable long-term access to low-cost natural gas feedstock is one of the biggest obstacles to expanding nitrogen fertiliser production.
Greater access to low priced natural gas and lower labour costs means most nitrogen-based fertiliser production is currently centred in the Middle East and Asia. China's Nitrogen Fertiliser Industry Association, for example, reports year-on-year growth of nearly 14 per cent.
"Despite the country's immense agricultural potential, there is a consistent lack of physical, social, and economic access to sufficient and nutritious food," stated the OPIC assessment of the Greenpark project. "Poor agricultural output and widespread poverty have resulted in extensive and persistent food insecurity, with as many as 70 per cent of Nigerians estimated as food insecure."
The Greenpark Petrochemical Company plant is Nigeria's second synthetic nitrogen project.