By Udeme Akpan

Experts and other stakeholders, weekend, urged the federal government to work towards expanding Liquefied Natural Gas, LNG investments in order to increase the supply of Liquefied Petroleum Gas, LPG, popularly known as cooking gas in Nigeria.

The bulk of the nation’s domestic supply of LPG comes mostly from the Nigerian LNG Limited, NLNG while part of it also comes from the global market.

But in different interviews with Energy Vanguard, the experts noted that more investments would culminate in increasing not only LNG but also the availability of LPG for domestic consumption.

They maintained that such LNG investments would increase revenue while reducing dependence on the global market for its LPG, which comes at the detriment of the nation’s scarce foreign exchange.

In a telephone interview with Energy Vanguard, the National President, Oil and Gas Service Providers Association, Mazi Colman Obasi, said: “The NLNG, currently operating six plants is very strategic to the economy of Nigeria, having contributed a lot, especially in terms of revenue generation, employment, capacity building, technology transfer and local content development.

“The present government should work towards enabling it to not only complete the ongoing Train 7 but also do additional Trains. This is desirable to create many multiplier effects, including achieving a massive supply of cooking gas in the nation. The increased cooking gas supply will go a long way in tackling energy poverty or crisis in Nigeria while stimulating sustainable development in many sectors of the economy.”

He said: “In Indonesia, the government took the census of the population of citizens using kerosene stoves and firewoods to cook before commissioning the production of gas cylinders. Thereafter, it caused the cylinders that were filled with cooking gas to be distributed to all concerned. That was how Indonesia ensured that their citizens enjoyed the use of cooking gas and boost supply, which culminated in gas flaring reduction. In Nigeria, the government said it has removed fuel subsidy, but commercial gas flaring is ongoing.”

Similarly, the Executive Director, Spaces for Change, S4C, a non-governmental organization working to defend the civic space through research, advocacy, policy influencing, and intersectoral engagement, Victoria Ibezim-Ohaeri, noted that a greater burden of the current energy crisis was borne by women, who need to have easy access to adequate LPG supply as soon as possible.

She said: “Our research shows that many women that cook daily pass through very difficult experiences, especially in the rural areas. Due to inadequate supply, many of them take to the use of firewood which has a negative impact on the environment. Therefore, additional investments are needed to provide massive LPG to all parts of the nation, including the rural communities.”

Recently, NLNG Limited called on stakeholders in the domestic 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.

He 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 included 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 assured the continued operations at the Company’s production plant, adding, “We continue to load and ship LPG to the domestic market. Therefore, we reassure Nigerians of our ongoing operations immediately 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.”

Dr. Mshelbila stated that LPG supply was at the heart of the matter when the NLNG’s Board of Directors decided to intervene, exponentially increasing its supply from 50,000 in 2007 tonnes to 150KT to 100 percent of its LPG volumes, and accounting for about 40 per cent of the domestic LPG (DLPG) market.

“Over the 15 years since 2007, NLNG has played a critical role in deepening the DLPG market with a reliable supply of LPG; expanding access to energy that is cleaner, more reliable, and affordable, the number of its offtakers increased from 7 at the onset to 42 today, the LPG ecosystem witnessed exponential growth across the value chain. With this increased DLPG penetration and accessibility, there has been a remarkable reduction in the use of kerosene, firewood, and charcoal, thus reducing the risk of respiratory conditions associated with smoke inhalation and increasing alignment with the global drive for a cleaner environment and lower GHG emissions.

“Today, the Nigeria Liquefied Petroleum Gas Association (NLPGA) in collaboration with Nigeria LNG Limited (NLNG) is celebrating the 15th anniversary of uninterrupted supply of domestic LPG in the country. The intervention has seen the supply of LPG grow from 60,000MT in 2007 to over a 1.3million MT in 2021 (a growth of over 1,000%). Today, the Nigerian LPG market is adjudged the fastest-growing globally.

“This scheme has encouraged massive investments in LPG infrastructure and has created over 150,000 jobs in the sector and resultant increased tax revenue for the government. The Federal Government’s Decade of Gas program has further helped in driving interest in propane, evidenced by NLNG’s startup of domestic propane which witnessed its first delivery in September 2021.

“NLNG has invested in a 13,000MT dedicated LPG carrier and security escort vessels facilitating efficient deliveries to Lagos and Port Harcourt terminals, invested in the refurbishment of the Lagos receiving terminal improving coastal delivery of LPG. It has also invested in throughput capacity at the Port-Harcourt Stockgap receiving terminal.”