Gas supply to the domestic market may not improve significantly even with the completion of Nigeria LNG’s (NLNG) Train-7, except there is a corresponding investment in the domestic gas ecosystem, says its Managing Director, Dr Philip Mshelbila. In a statement released by the foremost gas company, investment in supply would spark commitment along the value chain, including vertical integrations, he added.
Train-7 is expected to increase Nigeria’s capacity by 35 percent. Trains 1 – 6 currently produce a combined 22mtpa. Gas flaring is, however, still rampant, with data from the Nigerian Oil Spill Detection and Response Agency (NOSDRA) putting losses from gas flare at ₦707billion in 2021 and ₦184billion in the first half of this year. In spite of the demand-supply gaps in the domestic market, the country has been unable to fully implement policies to channel gas for domestic use, which could make the commodity affordable. The retail price for refill of a 12.5kg gas cylinder is over ₦11,000, compared to ₦3,500 a few years ago.
The NLNG boss said the investment interventions would reduce the switching cost to LPG, encourage more adoption, as well as reduce the cost of funding to support infrastructure expansion and growth as deliberate government action to encourage non-export of LPG by producers. Mshelbila said other urgent interventions included clarity of regulatory guidelines and requirements, alignment of government enforcement agencies and the widespread dissemination of information on safe practices in the handling and use of LPG.
“Supply and gas gathering initiatives faced major challenges in recent times, and this is due to floods ravaging operational sites of NLNG’s feedgas suppliers,” he said. In spite of declaring a force majeure, Dr Mshelbila assured of continued operations at the company’s production plant.
Dr Mshelbila is optimistic NLNG will continue to meet domestic gas needs. “Prior to the flooding, we were contending with the unrelenting effects of crude oil theft, which directly and severely impacted the supply of associated gas to our plant by the upstream producers. We continue to load and ship LPG to the domestic market. Therefore, we reassure Nigerians of our ongoing operations in the immediate and look forward to an urgent return to normalcy. We recognise the strides being made to address this by the government and its agencies and hope that this will soon translate into improved gas supply to our plant in Bonny,” he said.
Mshelbila said LPG supply was why the NLNG Board of Directors decided to intervene, increasing supply, accounting for about 40 percent of the domestic LPG (DLPG) market. “Over the 15 years since 2007, NLNG has played a critical role in deepening the DLPG market with a reliable supply of LPG. Expanding access to energy that is cleaner, more reliable, and affordable, the number of its offtakers increased from seven at the onset to 42 today. The LPG ecosystem witnessed exponential growth across the value chain,” said Mshelbila.
According to him, the Federal Government’s Decade of Gas programme has further helped in driving interest in propane, evidenced by NLNG’s startup of domestic propane, which witnessed its first delivery in September 2021. “NLNG has invested in a 13,000MT dedicated LPG carrier and security escort vessels facilitating efficient deliveries to Lagos and Port Harcourt terminals. It invested in the refurbishment of the Lagos receiving terminal, thereby improving coastal delivery of LPG. It has also invested in throughput capacity at the Port-Harcourt stockgap receiving terminal,” he added.
Ayodelé is a Lagos-based journalist and the Content and Editorial Coordinator at Meiza. All around the megacity, I am steering diverse lifestyle magazine audiences with ingenious hacks and insights that spur fast, informed decisions in their busy lives.
