NLNG calls for more investment to ensure reliable LPG supply
Nigeria LNG Limited (NLNG) has called on stakeholders in the domestic Liquified Petroleum Gas (LPG) value chain to invest in the supply of the product to ensure a reliable and steady stream of supply to the market.
Marking 15 years of domestic LPG supply in conjunction with the Nigerian LPG Association (NLPGA) at a conference in Lagos, NLNG’s Managing Director and Chief Executive Officer, Dr. Philip Mshelbila, said the investment in supply would intentionally spark commitment along the value chain, including vertical integrations.
He stated that NLNG was doing this through its further investment in Train 7, which will add about 35 per cent to its current capacity when completed, subject to gas supply and gas quality. He added that other domestic producers of LPG would need to make investments to enable their product to become available to the domestic market, rather than exporting it.
He also said the interventions were needed to reduce the switching cost to LPG, encourage more adoption, reduce the cost of funding to support infrastructure expansion and growth as well as deliberate government action to encourage non-export of LPG by producers.
Other urgent interventions required as outlined by Dr. Mshelbila also include clarity of regulatory guidelines and requirements, alignment of government enforcement agencies and the widespread dissemination of information on safe practices in the handling and use of LPG.
He noted that supply and gas gathering initiatives face major challenges in recent times, adding that due to floods ravaging operational sites of NLNG’s feedgas suppliers, there has been a state of emergency requiring declarations of force majeure. He, however, assured continued operations at the Company’s production plant.
“We continue to load and ship LPG to the domestic market. Therefore, we reassure Nigerians of our ongoing operations in the immediate and look forward to an urgent return to normalcy. Prior to the flooding, we were contending with the unrelenting effects of crude oil theft, which directly and severely impacted the supply of associated gas to our plant by the upstream producers. We recognise the strides being made to address this by the government and its agencies and hope that this will soon translate into improved gas supply to our plant in Bonny,” he stated.
Dr. Mshelbila stated that LPG supply was at the heart of the matter when the NLNG’s Board of Directors decided to intervene, exponentially increasing its supply from 50,000 in 2007 tonnes to 150KT to 100 percent of its LPG volumes, accounting for about 40 per cent of the domestic LPG (DLPG) market.
“Over the 15 years since 2007, NLNG has played a critical role in deepening the DLPG market with a reliable supply of LPG; expanding access to energy that is cleaner, more reliable, and affordable, the number of its offtakers increased from 7 at the onset to 42 today, the LPG ecosystem witnessed exponential growth across the value chain. With this increased DLPG penetration and accessibility, there has been a remarkable reduction in the use of kerosene, firewood, and charcoal, thus reducing the risk of respiratory conditions associated with smoke inhalation and increasing alignment with the global drive for a cleaner environment and lower GHG emissions.
“Today, the Nigeria Liquefied Petroleum Gas Association (NLPGA) in collaboration with Nigeria LNG Limited (NLNG) is celebrating the 15th anniversary of uninterrupted supply of domestic LPG in the country. The intervention has seen the supply of LPG grow from 60,000MT in 2007 to over a 1.3million MT in 2021 (a growth of over 1,000 per cent). Today, the Nigerian LPG market is adjudged the fastest-growing globally.
“This scheme has encouraged massive investments in LPG infrastructure and has created over 150,000 jobs in the sector and resultant increased tax revenue for the government. The Federal Government’s Decade of Gas program has further helped in driving interest in propane, evidenced by NLNG’s startup of domestic propane which witnessed its first delivery in September 2021.
“NLNG has invested in a 13,000MT dedicated LPG carrier and security escort vessels facilitating efficient deliveries to Lagos and Port Harcourt terminals, invested in the refurbishment of the Lagos receiving terminal improving coastal delivery of LPG. It has also invested in throughput capacity at the Port-Harcourt Stockgap receiving terminal,” he said.
He congratulated NLPGA for supporting and sustaining the value chain for 15 years.
NLNG is owned by four Shareholders, namely, the Nigerian National Petroleum Company Limited (49 per cent), Shell Gas B.V. (25.6 per cent), TotalEnergies Gaz & Electricite Holdings (15 per cent), and Eni International N.A. N. V. S.àr.l (10.4 per cent).
