Nigeria’s domestic gas market will be boosted and its capacity enhanced to respond to demands by Nigerians migrating from other fuel sources to cleaner energy at the completion of the Train 7 Project of the Nigeria Liquefied Natural Gas (NLNG) Limited, the company has said.  

This position was advanced via a statement signed by NLNG’s General Manager, External Relations and Sustainable Development, Eyono Fatayi-Williams, and made available to Kristina Reports on Monday, August 30, 2021 in Port Harcourt.

“NLNG’s drive towards deepening the domestic LPG market is pivotal in line with NLNG’s vision of helping to build a better Nigeria. The Company is optimistic that the eventual completion of its Train 7 Project will further deepen the domestic LPG market.”

The company also disclosed that, in furtherance of this drive, it has increased the volume of its annual commitment to the domestic gas market from 350,000 to 450,000 metric tons, which is about 100% of its Butane production.

It stated that committing 100% of its Butane production was a demonstration of its prioritisation of the domestic market with a view to helping it realise its domestic supply target safely.

“NLNG is primarily an export company that produces 22 MTPA of Liquefied Natural Gas (LNG) and 5 MTPA of Natural Gas Liquids (NGLs).

“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, NLNG 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.”

The company regretted that its efforts, however, was not enough to shore up the supply deficits in the market, thus other domestic producers and importers have to step in to try to close the gaps in supply, informing that its domestic supply is couriered by a dedicated 13,000 metric ton vessel, LPG Alfred Temile, which delivers the product to the market through Lagos and Port Harcourt ports.    

“NLNG’s current maximum Butane production meets about 40% of domestic demand. The balance is supplied by other domestic producers or via imports. Therefore, NLNG’s production alone is not sufficient.”

“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. 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.”

“NLNG’s domestic LPG pricing is most competitive compared to all other alternatives (imported and domestic supply).  However, it is important to note that several factors such as VAT, Forex, etc., impact the pricing of the product which is indexed to the international pricing model.”