By Adewale Sanyaolu
The Nigerian National Petroleum Company Limited (NNPCL) has said Nigeria with a capita consumption of 5.1 kilogramme of Liquefied Petroleum Gas (LPG), popularly called cooking gas ranks among the lowest in Sub-Saharan Africa.
Group Chief Executive Officer of NNPCL, Mallam Mele Kyari, stated this in his keynote address at the Nigerian Liquefied Petroleum Gas Association (NLPGA) and the Nigerian Liquefied Natural Gas (NLNG) 15th DLPG Supply Scheme Anniversary held in Lagos yesterday.
He said the predominate use of biomass leads to deforestation and farmers herders clashes, including damage to the ozone layer, lung cancer among other life threatening ailments.
He said the growth recorded in the LPG market experienced over the last 15 years could not have been possible without the robust collaboration between upstream gas suppliers, NNPC Limited, NLNG Limited and other private sector players.
He said the gathering of stakeholders in the LPG sector will serve as a collaborative platform for protective ideas that will generate ideas to effectively expand access to LPG for delivering affordable and cleaner source of energy to Nigerians as the country marches on to energy transition for a sustainable future.
He said the theme of the anniversary“15 years of Domestic LPG Supply Intervention: Looking Back and Looking Forward,” has underscored the significance of to increase the supply of LPG from 250,000 metric tones in 2015 to about 1.3 million metric tones in 2021, thereby achieving about 25 per cent compounding annual growth rate and stimulating significant market growth in the country.
He said that Nigeria has the ninth highest natural gas reserves in the world with 206 trillion cubic feet of gas reserves while the country produces two million tonnes of LPG annually.
He added that domestic LPG production from NLNG, NPDC , ExxonMobil and other gas processing plants constitute about 55 per cent of annual consumption while 45 per cent is being imported into the country.
Earlier in his opening remarks, the President of NLPGA, Mr. Felix Ekundayo, the umbrella body for all stakeholders in the LPG industry, admitted that NLNG’s domestic supply intervention, has created the much-needed foundation growing by over 1,000 per cent from a 60,000MT market in 2007 into a 1.3MT market and still growing.
According to him, this 15th year anniversary which intersects with the Decade of Gas as announced by the Federal Government of Nigeria presents an auspicious time to celebrate the achievements of the programme and deliberate on what opportunities a 200 million population presents, especially in areas of power generation, autogas, agriculture and technology as low hanging fruits.
For its part, NLNG called on stakeholders in the domestic Liquified Petroleum Gas (LPG) value chain to invest in the supply of the product to ensure a reliable and steady stream of supply to the market.
NLNG’s Managing Director and Chief Executive Officer, Dr. Philip Mshelbila, said the investment in supply would intentionally spark commitment along the value chain, including vertical integrations.
He stated that NLNG was doing this through its further investment in Train 7, which will add about 35 per cent to its current capacity when completed, subject to gas supply and gas quality.
He added that other domestic producers of LPG would need to make investments to enable their product to become available to the domestic market, rather than exporting it.
Mshelbila also said the interventions were needed to reduce the switching cost to LPG, encourage more adoption, reduce the cost of funding to support infrastructure expansion and growth as well as deliberate government action to encourage non-export of LPG by producers.
Other urgent interventions required as outlined by Dr. Mshelbila also include 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.
He noted that supply and gas gathering initiatives face major challenges in recent times, adding that due to floods ravaging operational sites of NLNG’s feedgas suppliers, there has been a state of emergency requiring declarations of force majeure. He, however, assured continued operations at the Company’s production plant.
“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. 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 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 stated.