·Denies being behind cooking gas price surge
By Ignatius Chukwu
The Nigerian Liquefied Natural Gas (NLNG) says it primarily produces liquefied natural gas (nlg), not liquefied petroleum gas (lpg) or cooking gas. On this score, the company’s General Manager, External relations and Sustainable Development, Eyono Fatayi-Williams, who made the clarification, said the NLNG could thus not have been responsible for the current spike in price of cooking gas.
The GM said it was grossly inaccurate to believe that the NLNG produces 22 Million Tonnes Per Annum (MTPA) of lpg but that it is an export company that produces 22 mtpa of lng and 5 mtpa of Natural Gas Liquids (NGLs).
According to Fatayi-Williams, the price of lpg in the domestic market is dependent on several market factors including the forces of demand and supply, and this could not have been the fault of the NLNG.
The company was speaking in relation to some news analysis on the price surge of cooking gas which tended to blame it on the activities of the NLNG. Fatayi-Williams said: “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 per cent of its Butane production. Butane gas is less volatile and is, therefore, suitable for cooking. In 2020 alone, NLNG supplied over 80 per cent of its lpg sales (Butane/cooking gas) to the Nigerian market.”
The company said by committing 100 per cent 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 per cent of domestic demand. The balance is supplied by other domestic producers or via imports. Therefore, NLNG’s production alone is not sufficient.”
It went further to state how it strives to achieve its aspiration for the domestic supply, saying 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.’
The statement said 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.
“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 provide for deepening the domestic LPG market.”
Domestic gas is rising in importance due to government drive to disconnect households from firewood and kerosene to use of lpg which is cheaper and cleaner. It is also expected to help convert the abundant natural gas that is being wasted through flaring.