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FG, IOCs in talks over retention of LPG output for domestic market

*There is pressure on the government to put an end to LPG smuggling into the country

The Federal Government has hinted that talks are ongoing with multinational oil firms on the modalities for retaining all Liquefied Petroleum Gas (LPG) volumes in-country as the country scramble to meet its target demand of three million tonnes for domestic output in 2023.

The reason, according to findings, may not be unconnected with the fact that Nigeria exported 700,000tonnes of Liquefied Petroleum Gas (LPG) in 2022, even as it grappled with inadequate local production to satiate domestic demand.

Indeed, the country consumed 1.4million tonnes in the year, out of which 800,000 tonnes were imported, according to data by the  Nigeria Midstream Downstream Petroleum Regulatory Agency (NMDPRA).

Only 600,000 tonnes of the 1.4Million tonnes consumed was locally produced, NMDPRA says. However, as the Federal Government scrambles for more domestic LPG output to meet its target demand of three million tonnes for 2023, the question is “why export such figures only to import more of the same products.”

Findings revealed that most of what is locally consumed is Butane, while the variant of LPG that is exported is Propane. Indeed, the 700,000 tonnes of Propane export left the country from processing plants run by Chevron and Exxon- Mobil.

Speaking to New Telegraph in an interview, the Programme Manager, National LPG Expansion Implementation Plan in the office of the Vice President, Mr. Dayo Adesina, hinted that the Nigerian authorities aimed to reduce all LPG exports to the barest minimum in order to concentrate on meeting the domestic market demand and consumption. “We now need those volumes for sure,”

Adesina said in the in- terview, adding that “even the Propane is needed for autogas, power generation and other sources of energy. Obviously, butane is for cooking.”

Adesina, himself a keen player in the LPG market and a former President of the Nigerian LPG Association, confirmed that talks were ongoing with Chevron and ExxonMobil on the modalities of retaining all LPG volumes in country. He said: “It is the Minister of Petroleum Resources that represents the Federal Government and I guess the joint venture partner in NNPC Limited as well.”

Adesina disclosed that one of the companies was “ready to free up 34,000 tonnes a month (meaning 408,000 tonnes a year), but then the specification (to convert from Propane to Butane), you need to have a spotter on the receiving end.” Recently, Adesina revealed that he invited stakeholders for a roundtable discussion on midstream processing of gas in Nigeria.

However, local producers of LPG (in 2022) included Nigeria Liquefied Natural Gas (NLNG)  Ltd (~350,000 tonnes Per Year), Kwale Hydrocarbon Nigeria Limited, KHNL, a subsidiary of Sterling Oil Exploration & Energy Production Co. Ltd (~150,000 tonnes per year), NNPC E&P Ltd (intermittent production from the Oredo field integrated gas plant), Platform Petroleum, (~20,000 tonnes per tear from Egbaoma gas plant).

Recently, the Chairman, Future Gas Limited and NLPGA Kano chapter Chairman, Alhaji Rabiu Garo, in an interview with New Telegraph, stated that the best the association could do is pressure the Federal Government to block the importation of gas in cylinders from Niger Republic.

“If the government can help increase local production and aid movement of LPG from the South, then there will be no need to be going to Niger Republic to import the gas in cylinders or with trucks.

“If we continue to discourage bringing gas in by people with cylinders (which is very dangerous), then I think we have done something good for the people here in Kano and Katsina.”

SOURCE: newtelegraphng.com

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