Home » GAS » NLNG Explains Hike in Price of LPG and $17.15 Billion Paid to FG as Dividend

NLNG Explains Hike in Price of LPG and $17.15 Billion Paid to FG as Dividend

The Nigeria LNG Limited has said that marketers were unable to offtake the full 450,000MT of liquefied petroleum gas (LPG) allocated to the Nigerian market by the company due to various factors.

Also the NLNG said that it has paid a total dividend of $17.15bn to the Federal Government since its inception in 1989.

Austin Ogbogbo, marketing manager of the NLNG , said this while speaking to journalists in Lagos.

Mr Ogbogbo noted that NLNG was not responsible for the supply shortfall of LPG, also known as cooking gas and the consequent price hike across the country.

He said the 450,000MT allocated to the domestic market was the total volume of butane produced annually by the NLNG, adding that only about 375,000MT was procured by gas marketers in 2020.

According to him, the inability of the marketers to offtake the LPG was due to logistics and infrastructure challenges as well as other factors in the industry.

He said that this meant that the NLNG supplied over 80 per cent of its LPG sales (butane/cooking gas) to the Nigerian market and was therefore prioritising the domestic market.

Mr Ogbogbo said the NLNG’s current maximum butane production can only meet about 40 per cent of the domestic market demand.

He said the balance was supplied by other domestic producers or via imports because NLNG’s production alone was not sufficient.

Mr Ogbogbo, however, expressed optimism that NLNG would increase its production capacity by 35 per cent with completion of Train 7, which will in turn boost domestic supply.

He said NLNG was primarily an export company that produces 22 MTPA of Liquefied Natural Gas (LNG) and five MTPA of Natural Gas Liquids (NGLs).

Mr Ogbogbo said the company was also working to supply LNG to the domestic market from 2022 to boost power supply and industrial development across the country.

The price of 12.5kg of cooking gas has risen from N3,200 a few months back to about N7,000 in some parts of the country.

The Nigeria LNG Limited said that it has paid a total dividend of $17.15bn to the Federal Government since its inception in 1989.

NLNG was incorporated in 1981 with the FG through the Nigerian National Petroleum Corporation owning 49 per cent of the total equity in the company.

Other shareholders are Royal Dutch Shell (25.6 per cent), Total (15 per cent) and Eni (10.4 per cent).

Ogbogbo said the company had earned $108bn in total revenue and had paid $35bn in dividends.

The company has also completed six Liquefied Natural Gas trains with a 22 metric tonnes per annum capacity and plans its seventh train completion by 2025.

Ogbogbo stated that the company in its bid to improve domestic supply of Liquefied Petroleum Gas began pushing the product into the domestic market in 2007 and had since increased its capacity from 50,000 metric tonnes per annum of LPG and six offtakers at the start, to 450,000 metric tonnes per annum and 43 offtakers currently.

He said, “As a safety conscious company, NLNG has deliberately supplied 100 per cent butane into the domestic market as it is less sensitive and safe for domestic cooking use with impeccable quality.

“In support of FG’s decade of gas programme as enshrined in the national gas expansion plan, NLNG is poised to ensure propane delivery into the domestic market.”

The company had earlier announced sales and purchase agreements with three Nigerian firms to facilitate the movement of 1.1 million metric tonnes per annum of Liquefied Natural Gas into the domestic market.

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