NLNG Denies Contributing To LPG Shortage In The Market

Yemisi Izuora

The Nigerian Liquefied Natural Gas, NLNG, limited has denied contributing to shortages and escalating prices of Liquefied Petroleum Gas, LPG, also called cooking gas in the domestic market.

The company clearly stated that it is an export oriented entity distinctively exporting Liquefied Natural Gas, LNG, and Natural Gas Liquids, NGL.

In a statement yesterday, Eyono Fatayi-Williams, General Manager, External Relations and Sustainable Development of NLNG, denied a publication by Punch Newspaper of 29th August 2021, titled “How high cost of cooking gas leaves Nigerians with deadly alternatives”.

Fatayi-Williams stated that it is grossly inaccurate to say that NLNG produces 22 Million Tonnes Per Annum (MTPA) of Liquified Petroluem Gas, otherwise known as cooking gas.

According to her, NLNG is primarily an export company that produces 22 MTPA of Liquified Natural Gas (LNG) and 5 MTPA of Natural Gas Liquids (NGLs).

She further stated that it was erroneous, to say that NLNG contributes to the supply shortfall of cooking gas in Nigeria and consequent price hike, explaining that the price of LPG in the domestic market is dependent on several market factors, including the forces of demand and supply.

On the supply side, the NLNG spokeswoman, said that the 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. In 2020 alone, NLNG supplied over 80% of its LPG sales (Butane/cooking gas) to the Nigerian market.” she said.

In other words, Fatayi-Williams maintained that by committing 100 per cent  of its Butane production, NLNG has prioritised the domestic market, thus realising its domestic supply target safely.

She added that NLNG’s current maximum Butane production meets about 40 per cent  of domestic demand, while the balance is supplied by other domestic producers or via imports as NLNG’s production alone is not sufficient.

Offering further explanation, she said that in order to achieve its aspiration for the domestic supply, a dedicated 13,000 metric ton vessel, LPG Alfred Temile, delivers the product to the market through Lagos and Port Harcourt terminals.

Unfortunately,  she noted that 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.

Added to this,  she said that NLNG’s domestic LPG pricing is most competitive compared to all other alternatives (imported and domestic supply), but factors such as Value Added Tax,  VAT, Foreign Exchange etc., impact the pricing of the product which is indexed to the international pricing model.

She said that the company’s drive towards deepening the domestic LPG market is pivotal in line with NLNG’s vision of helping to build a better Nigeria and that the Company is optimistic that the eventual completion of its Train 7 Project will further  will provide deepening the domestic LPG market.

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