Oil theft hinders NLNG's 100% LPG domestic supply

Nigeria Liquefied Natural Gas NLNG Limited has expressed regret that the outright theft of Nigerian crude oil is hampering its commitment to inject 100% of its gas and market challenges hampering LPG supply in the domestic market.

Nigeria LNG Limited (NLNG) has stated that it remains committed to supplying 100% of all its liquefied petroleum gas (LPG) production (butane and propane) to the Nigerian domestic market.

The company announced that in addition to crude theft, it also faces huge feed gas challenges and a lack of domestic market capacity to absorb the propane component of LPG.< /p>

NLNG Managing Director/Managing Director Dr Philip Mshelbila made the statement today at the 35th Annual General Meeting of the Nigerian LPG Distributors Association (NALPGAM) in Port Harcourt, NI. Rivers State.

He explained the challenges that have slowed the use of LPG in the country, leading to its low propane export to avoid tank situations at its plant.

The MD said; “When we made this commitment last year, the intention was for every molecule of butane and propane we produce in our plant to enter the domestic market and since then we have done everything possible to stick to it ever since. January 2022. We have been successful in supplying 100% of our butane production.

"We weren't able to get to 100% with propane, not because we didn't want to, but because the ability of the market to absorb propane just isn't there. We intend that all butane and propane we produce will be for the domestic market, whether the propane is used to mix with butane as cooking gas, used as autogas or used in industry to produce fuel. electricity,” he added.

Mshelbila explained in more detail; “Our production capacity as NLNG can supply around 400,000 tons per year, which is around 40% of the current national demand. This means that the balance must be imported. Last year, we supplied about 400,000 tons per year to the Nigerian market. But we have done so under extremely difficult circumstances where our gas supply at our plant has been severely compromised by many upstream factors, the most significant of which is crude oil theft.

“And because of the disruption that created, our capacity utilization dropped. Unfortunately, that remains the case today. If we have more gas coming into our plant, we can produce more LPG So for us, the supply issue starts with addressing the upstream supply issues, the biggest of which is the theft of crude oil,” he added.

According to him, the board of NLNG had decided to commit all its LPG products to the domestic market to change the narrative of exported LPG amid the difficulties faced by Nigerians in accessing energy.

He lamented that despite NLNG's commitment to supply 100% LPG to the market, some local producers continue to export LPG out of the country, calling on all stakeholders to work together to reverse the trend.

He described the Decade of Gas plan, which was fully sponsored by NLNG, as one of the most comprehensive plans in the industry, adding that industry stakeholders should work together to ensure the implementation, which will release and unblock the GPL. potential in the country.

He said the goal would be to saturate the market, which would lead to lower prices and the excess gas could then be exported as a source of revenue for the country.

“I think we need supportive government policies on LPG pricing. We need a usage policy that encourages the deepening of this market. We all know the challenges of grants as a whole,” Mshelbila said.

The highlight of the event was the presentation of the Association's Achievement Award to the NLNG.

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