NLNG’s domestic supply of LPG increases by 400%, as number of off-takers expands from 7 to 42 in fifteen years

The Nigeria LNG Ltd. (NLNG) has revealed that the domestic supply of  Liquefied Petroleum Gas(LPG) from its facilities increased from 50,000Metric tonnes (MT) in 2007, when it commenced production, to 450,000M in 2022, with a corresponding growth recorded in the number of off-takers which expanded from seven(7) to 42, in the period under review, after maxing out its entire domestic LPG production.

Dr. Philip Mshelbila, NLNG Managing Director,  made this known at the 15th anniversary event of the domestic LPG scheme in Nigeria, co-hosted by NLNG and the Nigerian LPG Association (NLPGA).

According to him, collaborative investment in the supply of the cooking gas in Nigeria would spark commitment along the value chain, including vertical integrations.

Mshelbila, who was represented at the event by Mr. Andy Odeh, NLNG, General Manager, External Relations and Sustainable Development,  said NLNG is committed to the construction of the ‘Train 7,’ which according to him would add about 35 per cent to its current capacity when completed. He however noted that the projected increase is based on regular feedstock from the gas suppliers.

The NLNG MD however challenged other LPG producers in Nigeria to increase their  investments in domestic production to increase domestic supply of cooking gas across the  domestic market. He added that efforts must be geared towards reducing exportation.

He suggested that increased production by all the domestic producers of LPG with the offtakers and marketers in Nigeria would reduce the switching cost to LPG, encourage more adoption, as well as reduce the cost of funding to support infrastructure expansion and growth as deliberate government action to encourage non-export of LPG by producers.

Mshelbila said, “We need 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 cooking gas in Nigeria.

“Supply and gas gathering initiatives faced major challenges in recent times, and this is due to floods ravaging operational sites of NLNG’s feed gas suppliers,” he said.

He  however restated that the NLNG has continued operations at its Bonny terminal despite the declarations of partial force majeure, on the backdrop of the flood affecting the natural gas supply to its facility.

The MD NLNG said, “We continue to load and ship LPG to the domestic market.

“Therefore, we reassure Nigerians of our ongoing operations immediately 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 said.

Mshelbila said LPG supply was why the NLNG Board of Directors decided to intervene, increasing supply from 50,000 in 2007 tonnes to 150KT to 100 per cent, 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 seven at the onset to 42 today.

“The LPG ecosystem witnessed exponential growth across the value chain,” said Mshelbila.

He added that with the increased DLPG penetration and accessibility, there had been a remarkable reduction in the use of kerosene, firewood, and charcoal.

He explained that this reduced the risk of respiratory conditions associated with smoke inhalation and increased 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 Ltd. (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 judged the fastest-growing globally.

“This scheme has encouraged massive investments in LPG infrastructure and has created over 150,000 jobs in the sector and resulted in increased tax revenue for the government,” he said.

According to him, the Federal Government’s Decade of Gas programme 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.

“It 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 added.