NLNG beats chest on domestic LPG supply
Sopuruchi Onwuka
The Nigeria Liquefied Natural Gas (NLNG) Limiyted has declared that it has no hand in the supply gaps and consequent hike in the pfrice of Liquefied Petroleum Gas (LPG) also called cokking gas in the country.
General Manager, External Relations and Sustainable Development, Mrs Eyono Fatayi-Williams, stated that NLNG which is primarily a gas export company has instead intervened in the domestic supply of cooking gas by feeding almost 100 percent of its butane production into the domestic market to ease access and pull down prices.
Mrs Fatayi-Williams was responding to a publication by a national daily which blamed the company for the scarcity of cooking gas in the country, alleging that NLNG produces 22 million tons of the LPG per annum and has been unable to meet 1.0 million tons of domestic demand.
She dismissed the report as totally ignorant of the operations of the company, stating that “NLNG is primarily an export company that produces 22 MTPA of Liquified Natural Gas (LNG) and 5 MTPA of Natural Gas Liquids (NGLs).”
On the price of the product, she also absolved the company of any level of price intervention, explaining that “the price of LPG in the domestic market is dependent on several market factors, including the forces of demand and supply.”
NLNG’s domestic LPG pricing is most competitive compared to all other alternatives, including imports and small domestic producers, she pointed out, adding, however, that several factors such as tax foreign exchange and other charges contribute to retail porices of the product “which is indexed to the international pricing model.”
The Oracle Today reports that only the price of premium motor spirit also called petrol is regulated in Nigeria. Other fuel products including cooking gas are deregulated and their prices are determined by market forces.
“On the supply side, NLNG plays a pivotal role in the Nigerian domestic LPG market in line with the commitment it made to help deepen the market. Recently, the Company increased the volume of its annual commitment to the market from 350,000 to 450,000 metric tons, which is about 100% of its Butane production. Butane gas is less volatile and is, therefore, suitable for cooking.
“By committing 100% of its Butane production, NLNG has prioritised the domestic market, thus realising its domestic supply target safely,” Mrs Fatayi-Williams stated.
She explained that the total butane production by the NLNG’s meets about 40% of domestic demand of cooking gas, adding that the balance is supplied by other domestic producers and importers.
She made it clear that NLNG’sproduction alone cannot sufficiently meet domestic demand for cooking gas.
The company explained that apart from dedicating its butan production to domestic supply, it has also provided logistics to ease penetration of the product from its coastal island location to the maninland and hinterlands of the country.
“In order to achieve its aspiration forthe 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 drive towards deepening the domestic LPG market is pivotal in line with NLNG’s vision of helping to build a better Nigeria. The Companyis optimistic that the eventual completion of its Train 7 Project will further will providedeepening the domestic LPG market,” she declared.
