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By Godwin Chukwumaechi, Port Harcourt
The Nigeria Liquefied Natural Gas (NLNG) Limited has expressed regret that the unmitigated theft of Nigeria’s crude oil is hampering its commitment to inject 100 percent of its gas into the domestic market.
This is as the company said it remains committed to supply 100% of its Liquefied Petroleum Gas (LPG) production to the Nigerian domestic market.
The company announced that besides crude oil theft, it was also facing huge challenges with feedgas and lack of capacity by the domestic market to absorb the propane component of the LPG.
Managing Director/Chief Executive Officer of NLNG, Dr. Philip Mshelbila, made the statement Thursday at the Nigerian Association of LPG Marketers (NALPGAM) 35th Annual General Meeting in Port Harcourt, Rivers State.
He explained that the challenges have slowed the utilisation of LPG in the country, leading to the sparse export of propane to avoid tank-top situations at its plant.
The MD stated; “When we made that commitment last year, the intention was that every molecule of butane and propane that we produce in our facility will come into the domestic market and since then we have made every effort to keep to that since January 2022. We have been successful in achieving supply of 100% of our butane production.
“We have not been able to reach 100% with propane, not because we don’t want to but because the market capacity to absorb the propane is just not there. We intend that all the butane and all the propane that we produce goes into the domestic market whether propane is being used to blend with butane as cooking gas, used as autogas, or used in industry to generate power,” he added.
Mshelbila explained further; “Our production capacity as NLNG can supply about 400,000 tons per annum which is somewhere roughly about 40% of the current national demand. This means that the balance has to be imported.
“Last year, we supplied about 400,000 tons per annum into the Nigerian market. But we did that under extremely difficult circumstances where our gas supply into our plant was heavily compromised by numerous upstream factors, the single biggest one of which is crude oil theft.
“And as a result of the disruption that this created, our capacity utilisation fell. Unfortunately, that remains the case today. If we have more gas input to our plant, we can produce more LPG. So the issue of supply for us starts with addressing the upstream supply challenges, the biggest of which is crude oil theft,” he said.
According to him, NLNG’s board had decided to commit all its LPG products to the domestic market to change the narrative of LPG being exported amidst difficulties faced by Nigerians in accessing energy.
He lamented that despite NLNG’s commitment to 100% LPG supply into the market, some local producers still export LPG out of the country, as he calling on all stakeholders to collaborate in reversing the trend.
Mshelbila described the Decade of Gas plan, which was fully sponsored by NLNG, as one of the most comprehensive plans in the industry, adding that stakeholders in the industry would need to work collaboratively to ensure implementation, which will unleash and unlock LPG potential in the country.
He said the aim would be to saturate the market, which would result in fall in price and excess gas can then be exported as a source of income for the country.
“I think that we need some favourable government policies concerning LPG pricing. We need a utilisation policy that encourages the deepening of this market. The government will need to adopt a phased removal of kerosene subsidies. We all know the challenges that subsidies provide as a whole”, Mshelbila stated.
High point of the occasion was the presentation of Award of Excellence by the association to the NLNG.
