NLNG Targets Domestic LNG Supply from July 2022

NLNG Targets Domestic LNG Supply from July 2022

*Company says Nigerian market unable to take up its 450,000mt cooking gas supply

Peter Uzoho

The Nigeria Liquefied Natural Gas (NLNG) Limited has announced plan to enter into the Nigerian domestic LNG supply space from July 2022.

It explained that the move was part of efforts to help bridge the perennial gas-to-power and gas-to-industry supply challenge in the country.

The liquefaction company also exonerated itself from the scarcity and rising cost of Liquefied Petroleum Gas (LPG) commonly known as cooking gas, saying the Nigerian market has not been able to take all of the 450,000 metric tons of LPG it has dedicated for the country.

The company stated this yesterday in Lagos, during an interactive session with journalists, stating that it was working to ensure that it makes contribution towards solving Nigeria’s energy challenge from the side of LPG and LNG supplies.

In his presentation at the session, the Marketing Manager, NLNG, Mr. Austin Ogbogbo, said the company would be starting its domestic LNG supply to Nigeria with initial one million tons per annum in July 2022.

Ogbogbo said to achieve that, NLNG was constructing more smaller terminals to be able to get more LNG to the Nigerian market.

He said in addition, the NLNG was working to get a dedicated LNG vessel for the domestic market similar to the LPG model and that the vessel would be owned a Nigerian in line with the Coastal and Inland Shipping (Cabotage Act).

He said once the infrastructure was ready, the first molecule of LNG from NLNG would hit the Nigerian market in July 2022.

Ogbogbo explained: “Our LNG intervention started in April 2018. We are constructing smaller terminals to be able to supply more LNG to domestic.

“We are also working to get a dedicated LNG vessel to the domestic market, it will be similar to the LPG model and a sippy-only plan. The vessel will be a Nigerian vessel, because that is what the CABOTAGE Act says.

“In July 2022, the first molecule of LNG will come to the domestic market.

“Just like we did in the LPG, we are also working to get a dedicated LNG vessel to ensure that when the infrastructure for the private sector is ready, we would move this product with our vessel to Nigeria. So, that’s in the works as at now, getting the vessel ready. It’s going to be a supply-only model.”

On the impact of the LNG supply to the Nigerian market, he said one million tons of LNG would be supplied per annum, translating to 130 million standard cubic feet of natural gas per day.
He said the volumes would be enough to power three million homes, with over 30 per cent of it powering industries and over 20 per cent for power plants.

Ogbogbo, however, reiterated NLNG’s commitment to steady LPG supply in Nigeria, saying it has dedicated 450,000mt to the domestic market but that the market was not yet able to take all the dedicated volumes owing to several logistical factors.

In the past one year, Nigerians have found it difficult trying to get LPG as the price of the product has continued to rise.

Of the 1.2mt LPG demand in the county, NLNG dedicated 450,000mt to the market, while marketers are left to import the remaining 750,000mt.

But Ogbogbo said because of certain logistical factors, only about 375,000mt of the dedicated 450,000mt of the company’s LPG supply was being taken by the domestic market.
The factors, according to him, had to deal with delay of the company’s LPG vessel at the Apapa port, preference of other white products for LPG by the terminal owners and insufficient coastal storage facilities.

He said if those logistical challenges were solved, the company would supply 100 per cent of its LPG production to the domestic market.

“We could go up go 100 per cent if the coastal storage is available. Sometimes, you want to supply, LPG takes the backstage. They prefer white products in the coastal storage or if it’s not white products, your vessel might be there for days, accumulating demurrage.

“Immediately that is cleared and we are sure we can come in and supply, we will push that in, and hopefully, we would ramp up to the 100 per cent,” Ogbogbo said.

Also, speaking on the LPG issue, Mr. Lateef Biobaku, of the NLNG Production Division (Gas Supply and Pipeline), who had earlier explained the LPG supply dynamics in the country, blamed inability of the off-takers to take all the dedicated 450,000 volumes for part of the scarcity and rise in price.

“Again, let me clarify, NLNG has allocated 450,000 metric tons of LPG to the market. What I was speaking to was the fact that the market has not been able to take up full 450,000mt for a variety of reasons.

“Just to put it in context, last year, the 450,000 was put on the table. But the market only took about 375,000mt,” Biobaku said.

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