NLNG clarifies role in LPG domestic market

…releases 80%  LPG sales to Nigerian market

By Uthman Salami

The Nigeria Liquefied Natural Gas Limited (NLNG) has  clarified its role in ensuring stable supply of Liquefied Petroleum Gas (LPG) for domestic market with the commitment of 80 per cent  equivalent of 450,000 metric tons of  Butane production.

The General Manager, External relations and Sustainable Development, NLNG, Eyono Fatayi-Williams stated this in a statement while reacting to a newspaper article which claimed that NLNG produces 22 Million Tonnes Per Annum (MTPA) of Liquified Petroluem Gas, otherwise known as cooking gas.

Fatayi-Williams described the article as “grossly inaccurate” noting that “NLNG is primarily an export company that produces 22 MTPA of Liquified Natural Gas (LNG) and 5 MTPA of Natural Gas Liquids (NGLs).”

She  added that, “It is also erroneous, to say the least, that NLNG contributes to the supply shortfall of cooking gas in Nigeria and consequent price hike.”

She emphasised that, “The price of LPG in the domestic market is dependent on several market factors, including the forces of demand and supply.”

The General Manager further reiterated the pivotal role of NLNG in  Nigeria’s domestic LPG market in line with the commitment  made to help deepen the market.

According to Fatayi-Williams, “Butane gas is less volatile and is, therefore, suitable for cooking. In 2020 alone, NLNG supplied over 80% of its LPG sales (Butane/cooking gas) to the Nigerian market.

“By committing 100% of its Butane production, NLNG has prioritised the domestic market, thus realising its domestic supply target safely.

“NLNG’s current maximum Butane production meets about 40% of domestic demand. The balance is supplied by other domestic producers or via imports. Therefore, NLNG’s production alone is not sufficient.

“In order to achieve its aspiration for the domestic supply, a dedicated 13,000 metric ton vessel, LPG Alfred Temile, delivers the product to the market through Lagos and Port Harcourt terminals.

“The vessel’s delivery to these terminals are occasionally hampered by challenges at the terminal, including storage capacity, terminal access, draft restrictions and prioritisation of other products over LPG. NLNG’s domestic LPG pricing is most competitive compared to all other alternatives (imported and domestic supply).”

While explaining further, she noted that, “several factors such as VAT, Forex, etc., impact the pricing of the product which is indexed to the international pricing model.”

She added that, “NLNG’s drive towards deepening the domestic LPG market is pivotal in line with NLNG’s vision of helping to build a better Nigeria.”

She noted that NLNG is optimistic that the eventual completion of the company’s Train 7 Project will further deepen the domestic LPG market.