NLNG grows LPG production to 1.5million tonnes, begins naira sale
CHIGOZIE AMADI
The Nigeria Liquefied Natural Gas Limited, on Wednesday, announced that its annual production of Liquefied Petroleum Gas, popularly called cooking gas, has increased to over 1.5 million metric tonnes.
It also announced that the whole 1.5million tonnes production was being sold in Nigeria, adding that the company had started supplying LPG in naira, as against the usual sale of gas in the United States dollars.
Operators in the oil and power sectors have repeatedly advocated the sale of LPG or Liquefied Natural Gas in naira, especially since the crash of the local currency against the dollar.
The call for naira transactions has also been extended to the sale of crude oil. LNG and crude oil are currently sold in dollars to both international and domestic buyers.
Speaking at a panel session during the ongoing 7th Nigeria International Energy Summit in Abuja, the General Manager, Finance, NLNG Limited, Fatima Adanan, said the multi-billion dollar firm had ramped up its LPG production to 1.5 million metric tonnes and was supplying all of it to the Nigerian market.
She said the “NLNG is selling LPG in naira,” to deepen cooking gas penetration across the country.
She said, “When we started we were producing 70,000MT, today we are producing upwards of 1.5million MT of LPG and for this LPG, our sole designated distribution point is Nigeria. So part of our vision as a company is to make sure that we make Nigeria a better place.
“As a people, we are the ones to make our country better and for us, we are starting with LPG and we are campaigning to move it into the market. The 1.5million MT is our own production as at 2023.”
She, however, noted that Nigeria required a lot more and so cooking gas importation had been ongoing.
“But as NLNG we will work harder to provide more LPG in such a way that the people who are using charcoal and biomass to cook, we have a trajectory that in the next two, three years we should have at least 40 per cent penetration by changing the energy mix in Nigeria from coal, biomass to using gas, which is cleaner.
“In the long run, that will address some of the climate goals. Our intention may not be to alleviate the climate goals, rather to make Nigeria better. But in doing that we are going to also impact the climate goals which is important,” Adanan stated.
Reacting to the remarks by Adanan, the immediate past Chief Executive of the NLNG, who anchored the panel session, Tony Attah, described the 1.5million metric tonnes LPG production by the firm as a worthy milestone.
He, however, revealed that studies showed that Nigeria required about five million metric tonnes annually, adding that the balance was being completed through LPG imports.
NLNG shareholders include the Nigerian National Petroleum Company Limited, which represents the Federal Government and holds the largest shareholding at 49 per cent; while Shell Gas B.V., a subsidiary of Shell Plc, holds 25.6 per cent.
TotalEnergies Gaz & Electricité Holdings owns 15 per cent of the shares, while Eni International holds the remaining 10.4 per cent.
This ownership structure is unique in the Nigerian oil and gas industry, as NLNG is an independent incorporated joint venture. This means that it has its own board of directors and management team, separate from the individual shareholders.
Speaking further on what the multi-billion dollar company was doing to ensure cooking gas penetration, Adanan said, “What NLNG has committed to do is to make LPG available in-country.
“So even though our requirement in Nigeria is much larger than what we are producing at the moment, the NLNG is growing and as we grow, we will be able to produce more and make it available for utilisation by Nigerians.”
She called for the education of women on the use of gas and urged the Federal Government to champion this, adding that such campaign would enable more rural women to move away from charcoal and biomass.
On concerns about the high cost of cooking gas, the NLNG official explained that though the cost of the commodity produced by the plant was cheaper, a larger percentage of the product was being imported by marketers at higher rates.
This, according to her, might be reason for the high cost of cooking gas, because marketers would price the product based on the cost of the imported one, particularly since NLNG supplies its 1.5million metric tonnes to marketers and not directly to end users.
Fatimah, however, stated that the company was working out ways to get its product to users on the street, though this could take some time to manifest.
Last week, The PUNCH reported that the Federal Government was working to ban the exportation of cooking gas, in a bid to increase its volume domestically to warrant a crash in price.
The government stated that LPG producers in Nigeria and key stakeholders in the industry had been told to stop exporting the commodity out of Nigeria, following the recent jump in the cost of cooking gas.
Findings showed that the cost of refilling a 12.5kg cylinder of cooking gas in Abuja, Lagos, Kano and some other states had climbed to about N18,000. It was specifically N17,500 in Abuja last week, a product that sold for less than N9,000 in November last year.
LPG dealers under the aegis of the Nigerian Association of Liquefied Petroleum Gas Marketers had predicted mid-last year that a 12.5kg cylinder would cost N18,000 going by the incessant hikes in its cost.
To tackle this, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, constituted a committee in November 2023, headed by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed.
But up till today, the cost of the commodity has maintained a northward movement, as many LPG users are gradually shifting to the use of charcoal.
