The Nigeria Liquefied Natural Gas (NLNG) on Monday clarified its role in the domestic liquefied Petroleum Gas (LPG) supply chain in the Nigerian market.
In rejoining recent media reports, which insinuated that the company was responsible for the current scarcity of LPG, resulting in the hike in the price of the commodity, popularly called cooking gas, the NLNG said its role in the Nigerian domestic LPG market was only pivotal.
“The NLNG is primarily an export company that produces 22 metric tons per annum (MTPA) of Liquified Natural Gas (LNG) and 5 MTPA of Natural Gas Liquids (NGLs).
“It is erroneous, to say the least, that NLNG contributes to the supply shortfall of cooking gas in Nigeria and consequent price hike.”
In recent weeks, reports have made the rounds that price of Gas has increased from N4.80 to over N7000 per 12.5 kilogramme cylinder.
The company’s General Manager, External Relations and Sustainable Development, Eyono Fatayi-William, said the price of LPG in the domestic market was dependent on several market factors, including the forces of demand and supply.
She said part of its role to support of the Nigerian domestic LPG market was in line with its declared commitment to help deepen the Nigeria LPG market.
As part of that commitment, Fatayi-William said the company resolved to increase the volume of its annual commitment to the market from 350,000 to 450,000 metric tons.
The increment, Fatayi-William said, this was about 100% of NLNG Butane production in Nigeria.
Butane gas, the NLNG said, was less volatile and, therefore, suitable for domestic cooking.
In 2020 alone, Fatai – Williams said the NLNG supplied over 80% of its LPG sales (Butane/cooking gas) to the Nigerian market.
“By committing 100% of its Butane production, NLNG has prioritised the domestic market, thus realising its domestic supply target safely.
“NLNG’s current maximum Butane production meets about 40% of domestic demand. The balance is supplied by other domestic producers or through imports. Therefore, NLNG’s production alone is not sufficient.
To achieve the company’s aspiration for the domestic supply, Fatayi-William said 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 the LPG#.
NLNG’s domestic LPG pricing, it said,
was most competitive, compared to all other alternatives (imported and domestic supply).
Besides, she said due to several factors, such as value VAT, foreign Forex, etc., impact the pricing of the product, which is indexed to the international pricing model.
“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 will provide deepening the domestic LPG market,” she said. .
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