- Absolves self from gas flaring
- Cooking gas sellers urge government to intervene
- PMB lauds the company for living up to its billing
- Train 7 to boost Nigeria’s economy.
By Clarice Azuatalam, Port-Harcourt
As Nigerians moan over the biting high cost of Liquefied Petroleum Gas (LPG) locally known as cooking gas, the Nigeria Liquefied Natural Gas Limited (NLNG), the only natural gas producing company in the country has exonerated itself from the high cost of the domestic gas.
The company rather blamed marketers for their inability to offtake the huge 450,000MTPA quantity of gas it has always allocated to the Nigerian market.
NLNG said that the major factor undermining the country’s LPG production is lack of refineries which now forces it to deploy Butane to help bridge the domestic demand gap because Butane gas is less volatile and is therefore suitable for cooking.
It was gathered that from 2014 to 2021, the capacity of Butane production by NLNG is 450,000 tonnes.
The company disclosed that this 450,000MTPA it allocated to the domestic market, only about 350,000 metric tonnes was procured by the gas marketers in 2020.
Speaking during an interactive session with journalists in Lagos, Austin Ogbogbo, Marketing Manager of NLNG, insisted that the firm is not to blame for the shortfall of cooking gas and its consequent high cost.
Ogbogbo rather fingered marketers for the scarcity of the product which he also said is caused by logistics, infrastructure challenges and other factors plaguing the industry.
Despite that marketers offtake only 350,000 metric tonnes out of the 450,000 metric tonnes of Butane (LPG) , the company produces for domestic consumption, the Marketing Manager of NLNG said the balance was supplied by other domestic producers or via imports because NLNG’s production alone is not sufficient.
He raised hope of Nigerians by explaining that the company is also working to supply LNG to the domestic market from 2022 to boost power supply and industrial development across the country.
Besides, when its Train 7 project is completed, the NLNG added that it would be able to increase its production capacity by 35 per cent, to support domestic market needs.
But Mr Wole Adeyemo who sells domestic gas in Woji, Port Harcourt is not enthused by this as it is still a long way to go.
Adeyemo expressed concern that the high cost of the product is “making me have bad market”, pointing out that some of his customers are now resorting to the use of kerosene stove to cook.
He said that it is unimaginable that “the 12.5 kilograme of LPG which sold at six thousand naira in August this year is now eight thousand naira. How many homes can afford that?”
To him, the hike in price is due to exchange rate which he said “as dollar rises, it affects market prices and it is only government that will help to check this price increase.”
To Osita Uwadiegwu who also sells cooking gas on Ikwerre Road, Port Harcourt, “my business is going down because people are finding it difficult to feed these days. After eking out what to eat, then gas to cook the food becomes a problem.”
Like Adeyemo, Uwadiegwu called on government to intervene in this high cost of cooking gas, “if not, people will resort to use of kerosene stove and fire wood, which is not also good for our environment,”
Verbatim was told that the LPG price has continued to rise due to rapid devaluation of the naira and other economic indices regardless of the fact that Nigeria is sitting on about a 206 trillion standard cubic feet of gas.
It was also gathered that it now costs marketers about eight million naira to import 20 million tons of the product into Nigeria as against the seven million it was a few months ago.
Additionally, Verbatim gathered that NLNG, had in an earlier statement, said it recently increased the volume of its yearly commitment to the market from 350,000 metric tonnes to 450,000 metric tonnes, which, according to the company is about 100 per cent of its Butane production.
The current maximum Butane production which the company produces can only meet about 40 per cent of the domestic market demand.
To meet up with its ambition for domestic supply, a dedicated 13,000 metric tonnes vessel, “LPG Alfred Temile” delivers the product to the market through Lagos and Port Harcourt terminals.
The delivery at these terminals by the vessel is sometimes hampered by challenges such as terminal access, storage capacity, draft restrictions and prioritisation of other products over LPG.
The company first ventured into the domestic gas in 2007 to ensure that the product is available for the domestic market and has so far put 450,000 tonnes into the domestic market.
At the Lagos interactive session, Ogbogbo also absolved his company from gas flaring saying: “NLNG does not flare gas, we are out to help eliminate gas flares but sometimes, you see our systems emit flares, these are occasional flares which happens when we want to shutdown and free the movement of natural gas and the only way to achieve that, is disposition of flares because you cannot put hydrocarbons into the environment, otherwise it will be affecting the Ozone laye.”
He further explained that safety is of great importance to the company, which is why “we are working with all the regulatory agencies to ensure that gas is delivered safely to them”, because it is structured for midstream production.
Also speaking at the Lagos interactive session, Lateef Biobaku, the Manager, Gas Supply and Pipeline Assets, NLNG, Bonny, Rivers State disclosed that the company is primarily an export company that produces 22 MTPA of Liquefied Natural Gas (LNG) and five MTPA of Natural Gas Liquids (NGLs).
The coming of Train 7 which will be completed in 2025, Biobaku said will improve the firm’s production capacity and domestic market intervention.
Making her own contributions, Mrs Sophia Horsfall, the Manager, Corporate Communications and Public Affairs, said NLNG remains committed to making more gas available to Nigerians.
It should be recalled that President Muhammadu Buhari on June 15, 2021inaugurated the much-awaited Train 7 of the NLNG.
Speaking when he inaugurated the Train 7 virtually, Buhari said the success story of the NLNG has proved that that Nigeria has great capacity to deliver value to the world by harnessing our natural resources.
Buhari said that he was enthused to see the transformation of NLNG which started as a project in the early 90s and has achieved over 20 years of responsible operations and steady supply of liquefied natural gas, liquefied petroleum gas and natural gas liquids into the global market.
He said in consonance with the outline in the National Gas Policy of 2017 “the focus of his administration is to boost the development of Nigeria’s abundant gas resources, strengthen the gas value chain, develop the much-needed infrastructure and enhance safe operations in the sector” and urged for “the completion of the project on time”
The President also said: “Through the Decade of Gas initiative, which I recently launched, we will transform Nigeria into a major gas and industrialised nation with gas playing the key role as revenue earner, fuel for industries and necessary feed for petrochemicals and fertiliser plants.”
He noted with delight that “NLNG has generated $114 billion in revenues over the years, paid $9 billion in taxes; $18 billion in dividends to the Federal Government and $15 billion in feed gas purchase.
“These are commendable accomplishments by the company’s100 percent Nigerian Management Team.
“With this level of performance, I can only hope that the company continues to grow starting with this Train 7 project but also positioning Nigeria to thrive through the energy sector.”
“I commend the shareholders of NLNG, the Federal Ministry of Petroleum, NNPC and the NCDMB and other stakeholders for very exemplary collaboration which has culminated in this great opportunity for Train 7.
“I thank the foreign investors for the confidence reposed in Nigeria, and assure all Nigerians and potential investors in the Oil and Gas sector that Federal Government will continue to create enabling environment to develop the sector and bring the full benefits of Gas closer to our people.”
Also speaking at the inauguration of the Train 7, the Minister of State for Petroleum, Chief Timipre Silva said the incorporation of NLNG Limited in 1989 and its eventual commencement of operation ten years later in 1999 represent one of the bold steps taken by the Federal Government to partner with global institutions, to deliver benefit to our country.
Silva stressed that the nation’s operational flare settings had reduced drastically from 65% when NLNG came into operation to about 12% today.
It was further gathered that the Train 7 which is of strategic national importance would amongst other things provide about 12,000 jobs at the peak of its construction with increased revenue to the Federal Government and about 10billion dollars in foreign direct investments, thus making Nigeria to “fly on wings of gas.”