Nigeria LNG Limited (NLNG) has expressed commitment  to supply all its Liquified Petroleum Gas (LPG) production (butane and propane) to the Nigerian domestic market despite feedgas and market challenges.

NLNG’s Managing Director/Chief Executive Officer, Dr. Philip Mshelbila, made the statement on Thursday  at the Nigerian Association of LPG Marketers (NALPGAM) 35^th Annual General Meeting in Port Harcourt, Rivers State.

He maintained that there were challenges which have slowed the utilisation of LPG in the country, which include the inability of the market to completely absorb NLNG’s propane production, leading to its sparse export of propane to avoid tank-top situations at its plant.

“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 said.

“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 added.

He said the 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 stated that despite NLNG’s commitment to 100% LPG supply into the market, some local producers still export LPG out of the country. He called on all stakeholders to collaborate in reversing the trend.

He described the Decade of Gas plan, which was fully sponsored by NLNG, as one of the most comprehensive plans in the industry. He said stakeholders in the industry will 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 will 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,” he said.

Shell has acquired Daystar Power, a Nigeria-based provider of hybrid solar power solutions to commercial and industrial businesses, as it launches its renewable power presence in Africa.

The deal, which is subject to regulatory approvals, marks a significant acquisition for Shell which has long been active in the continent’s hydrocarbons market but must look for new sources of growth in light of climate change and the gradual phasing out of fossil fuels.

“This deal marks our first power acquisition in Africa and a fundamental step for Shell in growing our presence in emerging power markets. We have had a long and established presence in West Africa and with Daystar Power, we are taking our first steps into the renewable power space,” said Thomas Brostrom, Shell’s executive vice-president for renewable generation.

“As we do this, we’re helping to address a critical energy gap for many who currently rely on diesel generators for backup power. Daystar Power has a loyal customer base and a promising growth outlook, and by combining our efforts and expertise, I believe we can make a real difference in the energy transition, for West Africa and beyond.”

Daystar Power’s co-founders and management team will stay in place as the firm looks to further build its operations in West African markets, while expanding to East and Southern Africa. The firm says it aims to its install solar capacity of 400MW by 2025 in a bid to supply the growing energy needs of commercial and industrial businesses.

The Nigerian National Petroleum Company Limited (NNPCL) is hoping to supply of liquefied petroleum gas (cooking gas) this year by 194 percent.

The company said it will up the supply from 1.7milliion metric tonnes supplied last year to 5mmt this year, adding that in order to achieve this, it is partnering with the Indian Oil Company, IOC, after the Asian country boosted its LPG penetration from 62 percent in 2016 to 99.8 percent by August 2019.

Engr. Adeyemi Adetunji, Group Executive Director, Downstream, while disclosing this at the World LPG Association India-Nigeria Summit 2022 in Abuja, said Nigeria has a lot to learn from the Indian experience.

He said that NNPC Limited is positioned to deploy 740 LPG Micro-Distribution Centers (MDCS), 37 Filling Plants and Skids in its 541 stations within the next three years.

He explained that “Nigeria has identified its abundant gas resources as fuel for energy transition which informed her Net Zero commitments by 2060 and the declaration of 2021-2030 as Decade of Gas.

“NNPC Limited is an energy company with new investments in gas, power, and renewables. Key pipeline projects such as
ELPS I1, OE5 and AKK to deliver a total of 6.2 billion cubic feet of gas per day to demand nodes across the country are at various stages of completion.We have strong presence in the LPG value chain contributing about 45% of Domestic supply via JVs (Oso Bonny River Terminal), affiliates (Nigeria LNG Ltd & Ashtavinayak Hydrocarbon Limited) and subsidiaries (NPDC)”, he added.

He noted that “the initial target is to do 5 million metric tons, in the next two, three years, but there is the need to do much more. I believe that template will be revised very soon”.

Also speaking at the event, Amb. Adeyemi Dipeolu, the Special Adviser to the President on Economic Matters in the Office of the Vice President, noted that while LPG penetration in the country was still very low, the Federal Government hopes to convert 30 million households to the use of LPG by year 2027.

He noted that “following the implementation of government’s gas expansion initiatives, and the presidential assent to the PIA investors stand in good stead to benefit from the vast opportunities available for unlocking Nigeria’s abundant gas resources for shared prosperity”.