The Nigeria Liquefied Natural Gas Limited declared that it has reached a record-breaking 1.5 million metric tonnes of output per year of Liquefied Petroleum Gas, or cooking gas on Wednesday.
It stated that the whole 1.5 million tonne production was being sold in Nigeria and that the business had begun to provide LPG in naira instead of the US dollars that is typically used for petrol sales according to The PUNCH.
Operators in the energy and electricity industries have long argued in favour of selling liquefied natural gas in naira, particularly in the wake of the local currency’s depreciation against the US dollar.
The sale of crude oil is now included in the call for naira transactions. Both local and foreign consumers are presently able to purchase LNG and crude oil in US dollars.
The multibillion dollar company has increased its LPG production to 1.5 million metric tonnes and is supplying all of it to the Nigerian market, according to General Manager, Finance, NLNG Limited, Fatima Adanan, who was speaking at a panel session during the ongoing 7th Nigeria International Energy Summit in Abuja.
She declared, “NLNG is selling LPG in naira,” in an effort to increase the nation’s use of cooking gas.
“When we first started, we were generating 70,000 MT of LPG; today, we are producing upwards of 1.5 million MT, and Nigeria is the only country where we have a dedicated distribution point for this LPG. Therefore, one of our company’s goals is to ensure that Nigeria is improved.
“It is up to us as a people to improve our nation, and we are starting with LPG and pushing for its introduction into the market. As of 2023, 1.5 million MT are produced internally.”
She did point out that cooking gas imports had been continuing since Nigeria needed a lot more.
“However, as NLNG, we will put in more effort to supply more LPG so that those who currently cook with charcoal and biomass can switch to gas, which is cleaner, and within the next two to three years, we should have at least 40% penetration.”
“That will eventually address a few of the climate targets. Our purpose is to improve Nigeria, not necessarily to mitigate the climate goals. However, doing so will also have an influence on the climate targets, which is significant, according to Adanan.
In response to Adanan’s statements, the recently retired Chief Executive of the NLNG and moderator of the panel, Tony Attah, hailed the company’s 1.5 million metric tonnes of LPG output as an admirable accomplishment.
He did, however, disclose that research indicated Nigeria needed around five million metric tonnes per year, and that LPG imports were being used to make up the difference.
Among the owners of NLNG are the Nigerian National Petroleum Company Limited, which is the Federal Government’s representative and has the largest shareholding at 49%; another stakeholder is Shell Gas B.V., a Shell Plc subsidiary, with a 25.6% interest.
Eni International controls the remaining 10.4% of the shares, with TotalEnergies Gaz & Electricité Holdings owning 15% of the total.
In the Nigerian oil and gas sector, this ownership structure is exclusive since NLNG is a separately formed joint venture. This indicates that it is independent of the individual shareholders and has its own board of directors and management group.
Speaking further on the multibillion-dollar company’s efforts to guarantee the penetration of cooking gas, Adanan stated, “NLNG has pledged to making LPG available in the country.
“Therefore, even though Nigeria’s needs much outweigh our current production, the NLNG is expanding, and as we do, we will be able to produce more and make it accessible for use by Nigerians.”
She said that more rural women would be able to switch from using biomass and charcoal if the Federal Government supported a program to educate women about petrol usage.
Over concerns on the high price of cooking gas, the NLNG official clarified that although the commodity generated by the facility was produced at a lower cost, a greater proportion of the product was being imported at a higher rate by marketers.
She said that this may be the source of the high price of cooking gas as sellers would set their prices depending on the cost of imported gas, especially since NLNG provides its 1.5 million metric tonnes of gas to sellers rather than to final consumers.
Though it would take some time to materialize, Fatimah said that the firm was devising strategies to bring its goods in front of consumers on the street.
It was revealed last week that the federal government was attempting to outlaw cooking gas exports in an effort to boost domestic production to the point where a price collapse would be justified.
Following a recent increase in the price of cooking gas, the government said that major players in the business and Nigerian producers of LPG had been instructed to cease exporting the product outside of the country.
According to research, it now costs around N18,000 to replenish a 12.5 kilogram cooking gas cylinder in Abuja, Lagos, Kano, and a few other states. Specifically, it was N17,500 in Abuja last week, a product that sold for less than N,9000 in November last year.
Based on continuous price increases, LPG dealers operating under the Nigerian Association of Liquefied Petroleum Gas Marketers had projected in the middle of the previous year that a 12.5kg cylinder would cost N18,000.
In order to address this, the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s Chief Executive, Farouk Ahmed, formed a committee in November 2023 under the direction of Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo.
However, the price of the item has continued to rise as more and more LPG users increasingly switch to using charcoal.
However, Ekpo said last week, outside of the internal stakeholders’ meeting, that the Federal Government had ordered LPG manufacturers to cease exporting the product.
