The Nigeria Liquefied Natural Gas, NLNG Limited, in a major decision to crash the rising price of Liquefied Petroleum Gas, LPG or cooking gas in the market has resolved to cut its LPG exports to increase supply to the domestic market as the country grapples with gas shortages.
“As part of the measures to support the Federal Government’s efforts to deepen domestic gas supply and economic growth, Nigeria LNG is reducing LPG exports and increasing supplies to domestic market,” NLNG managing director Philip Mshelbila told participants at an industry conference organized by the National Association of Energy Correspondents, NAEC, in Lagos.
“NLNG is now increasing supply to domestic market to 450,000 metric tons mt per annum,” Mshebilia said.
It was supplying 250,000 mt/year to the domestic market and exporting the balance of its output to Western markets.
NLNG, a venture involving the state-owned NNPC and Shell, Eni and TotalEnergies, produces around 7 million mt/year of LPG (propane and butane) from the six trains.
To meet the rise in the supply volume, NLNG said it had increased the number of offtakers to 43 from the initial six contracted in 2007.
Nigeria’s domestic LPG demand is projected to grow to 3 million mt/year by 2026, from 1 million mt now, according to government estimates.
The chief executive of NNPC Mele Kyari said Nov. 2 that Nigeria requires up to $2.7 billion to revamp LPG and other gas distribution infrastructure in the country.
Oil producers have said they are prepared to channel investment in building the needed infrastructure to boost Nigeria’s domestic gas supply.
The managing director of Shell Nigeria Gas, Ed Ubong, said Nov. 2 that while much of the gas from Shell operated Gbaran-Ubie field, which produces about 864 MMcf/d of gas, is for export, the company is building infrastructure to deliver the gas to local industries.
“Shell is investing in gas portfolio that will increase supply for Nigerian and international customers via an expanding network of plants, pipelines and export terminals,” Ubong said.
Nigeria, Africa’s biggest oil producer, has the world’s ninth largest proven gas reserves, at 200 Tcf, according to official estimates.
However, the country burns off vast amounts of gas produced along with crude from mostly onshore oil fields in the Niger Delta, due to the lack of infrastructure to make use of it.