NLNG’s DLPG Scheme Guarantees 40% Cooking Gas Supply, Boosting Domestic Market Resilience

The Nigeria Liquefied Natural Gas Limited (NLNG) has announced that its domestic liquefied petroleum gas scheme, known as the DLPG Scheme, ensures a guaranteed delivery of 40% into the Nigerian market for cooking gas.

During a recent meeting with President Bola Ahmed Tinubu, NLNG’s Managing Director/Chief Executive Officer, Dr. Philip Mshelbila, reported that the DLPG Scheme has successfully ensured the availability, supply, and affordability of liquefied petroleum gas (LPG), also known as cooking gas. Additionally, the scheme has played a pivotal role in fostering the development of various segments of the DLPG value chain within Nigeria.

As a result of this initiative, the entirety of the produced LPG volumes from NLNG is directed towards the domestic market, effectively addressing around 40% of Nigeria’s domestic LPG demand. The remainder of the demand is met through imports, which exposes the importers to the fluctuations of the international market, leading to price variations for end consumers. Moreover, the ongoing foreign exchange challenges faced by the nation further contribute to complexities in LPG imports, thereby affecting marketers and consumers alike.

To address these obstacles, Nigeria must enhance its gas processing capacity. To that end, investments in infrastructure are crucial. Currently, Nigeria lacks sufficient gas processing and storage facilities, prompting initiatives to bolster local capacity, such as Ardova Plc’s construction of a 20,000 metric tons (MT) gas storage facility in Lagos state.

One of the prominent challenges in the Nigerian gas processing sector has been downtime and the burden of indiscriminate taxes and levies. The recent discontinuation of fuel subsidies by the government has spurred interest in converting vehicles and generators to LPG and other gas alternatives. This growing interest is anticipated to elevate demand within the country, thereby expanding the market throughout 2023 and 2024. This underscores the importance of boosting local capacity.

With the appointment of a gas minister, the focus is likely to shift towards enhancing gas investments to augment local supply. HydroCIS, an energy data company, predicts a year of recovery for the LPG sector in 2023. They anticipate that by the close of 2023, Nigeria could reach a supply of up to 1.3 million tons of LPG, driven by a 15% annual growth rate. Their projections extend to 2024, with the country potentially achieving up to 1.5 million tons in LPG supply.

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