NLNG Blames LPG Supply Gap On Gas, Market Challenges

Nigeria LNG Limited (NLNG) has said it remains committed to supply 100 per cent of all its Liquified Petroleum Gas (LPG) production (butane and propane) to the Nigerian domestic market despite feed-gas and market challenge

NLNG’s managing director/chief executive officer, Dr. Philip Mshelbila, speaking yesterday at the Nigerian Association of LPG Marketers (NALPGAM) 35th Annual General Meeting (AGM) in Port Harcourt, Rivers State, noted that there were challenges which have slowed the utilisation of LPG in the country, which include the inability of the market to completely absorb NLNG’s propane production, leading to its sparse export of propane to avoid tank-top situations at its plant.

“When we made that commitment last year, the intention was that every molecule of butane and propane that we produce in our facility will come into the domestic market and since then we have made every effort to keep to that since January 2022. We have been successful in achieving supply of 100 per cent of our butane production.

“We have not been able to reach 100 per cent with propane, not because we don’t want to but because the market capacity to absorb the propane is just not there. We intend that all the butane and all the propane that we produce goes into the domestic market whether propane is being used to blend with butane as cooking gas, used as autogas, or used in industry to generate power.

“Our production capacity as NLNG can supply about 400,000 tons per annum which is somewhere roughly about 40% of the current national demand.

“This means that the balance has to be imported. Last year, we supplied about 400,000 tons per annum into the Nigerian market. But we did that under extremely difficult circumstances where our gas supply into our plant was heavily compromised by numerous upstream factors, the single biggest one of which is crude oil theft.

“And as a result of the disruption that this created, our capacity utilisation fell. Unfortunately, that remains the case today. If we have more gas input to our plant, we can produce more LPG. So the issue of supply for us starts with addressing the upstream supply challenges, the biggest of which is crude oil theft,” he added.