NLNG blames off-takers for hike in gas price
The Nigeria LNG Limited (NLNG) has attributed the current increase in gas price in the country to failure of Liquefied Petroleum Gas (LPG) off-takers to collect all 450,000 metric tonnes of cooking gas, otherwise known as LPG, supplied to the Nigeria Domestic Market by the company, adding that this equally accounts for the product’s scarcity.
The company also disclosed its plans to penetrate the Nigeria domestic market with gas supply by July, 2022.
The cause of the gas price hike was disclosed by the company’s Head, Scheduling and Planning, Production Division (Gas Supply and Pipeline), Mr. Lateef Biobaku, during an interactive session with journalists yesterday, in Lagos.
During his speech on LPG supply dynamics in the country, Mr. Biobaku explained that the rise in the price of LPG in the nation is due to off-takers inability to take all 450,000 metric tonnes of LPG supplied by the company, adding that it is also one of the reasons for its scarcity.
He said, “Let me clarify, NLNG has allocated 450,000 metric tons of LPG to the market. What I was speaking to was the fact that the market has not been able to take up full 450,000mt for a variety of reasons.
“Just to put it in context, last year, the 450,000 was put on the table. But the market only took about 375,000mt,” Biobaku said.
The company also said that it will increase its supply of Liquefied Natural Gas (LNG) to the domestic market through the construction of terminals, across the nation.
Mr. Austin Ogbogbo, Marketing Manager, NLNG, in his speech, said that the company will begin its initial supply of one million tonnes per annum of LNG to the local gas market in Nigeria, starting from July, 2022.
“Our LNG intervention started in April 2018. We are constructing smaller terminals to be able to supply more LNG to the domestic market.
“We are also working to get a dedicated LNG vessel to the domestic market, it will be similar to the LPG model and a sippy-only plan. The vessel will be a Nigerian vessel, because that is what the CABOTAGE Act says.
“In July 2022, the first molecule of LNG will come to the domestic market.
“Just like we did in the LPG, we are also working to get a dedicated LNG vessel to ensure that when the infrastructure for the private sector is ready, we would move this product with our vessel to Nigeria. So, that’s in the works as at now, getting the vessel ready. It’s going to be a supply-only model,” he said.
He further stated that the company will supply the market 100 per cent of its LPG if production logistics issues are sorted out.
“We could go up go 100 per cent if the coastal storage is available. Sometimes, you want to supply, LPG takes the backstage. They prefer white products in the coastal storage or if it’s not white products, your vessel might be there for days, accumulating demurrage.
“Immediately that is cleared and we are sure we can come in and supply, we will push that in, and hopefully, we would ramp up to the 100 per cent,” he said.