Sopuruchi Onwuka
Federal government has declared that it is engaging its traditional partners in the petroleum industry to assist with dedication of their total gas liquids production for domestic market supply as the country struggles with price jumps in the prices of kitchen fuels.
The Authority Chief Executive (ACE) of the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr Farouk Ahmed, told delegates at the ongoing Oil Trading and Logistics (OTL) Expo 2024 in Lagos that it working to secure additional supply of gas operators of fractionation plants in government’s joint ventures with oil companies in the country.
ACE of NMDPRA, Engr Farouk Ahmed
He said such interventions have become necessary in assisting government drive home its domestic fuel diversification agenda, the LPG penetration programme and the nascent CNG propagation initiative.
The Oracle Today reports that despite all assurances that cooking gas would continuously be cheaper than kerosene, the demand pressure associated with massive switch to cleaner burning liquefied petroleum gas (LPG) in public response to the prevailing gas penetration initiatives has instead resulted in price escalation and public outcry.
The public fury against rising prices has elicited official promises for intervention but the pledges by the Minister of Petroleum Resources in charge of gas, Hon Ekperipke Ekpo, is yet to translate to any changes in the market place as gas prices continue to surge.
Earlier than now, similar price jumps stoked by acute supply deficits had elicited direct intervention from the Nigerian Liquefied Natural Gas (NLNG) Limited which had arrested the situation by dedicating its full LPG output to domestic market.
But as government drove gas penetration to divert demand prom deregulated kerosene, more consumers continued to switch and transfer active and latent demand of kitchen fuels from kerosene and firewood to cooking gas.
Cooking gas prices got out of hand with the prevailing foreign exchange rate for the Naira as dealer meet domestic demand with a mix of local and import supplies.
At OTL African Energy Week in Lagos, Engr Ahmed stated that government is already in talks with have operators of the NNPC/MPN joint venture and the NNPC/CNL joint venture on domestication of LPG produced in their facilities in the country. He said the proposal is to encourage replication of the NLNG intervention by the oil companies.
“In line with the Government’s directives and efforts on improving affordability and availability of cooking gas, we have been engaging stakeholders on domestication of LPG produced in-country by producers especially Chevron Nigeria Limited (CNL) and Mobil Producing Nigeria (MPN), similar to NLNG which has domesticated 100% of its Butane production since year 2022,” he stated.
He also stated that the NMDPRA would engage stakeholders in the development of domestic LPG pricing framework in order to make the product readily available and affordable to the consumers.
The Oracle Today reports that Mobil Producing Nigeria (MPN) Unlimited operates fractionation plants at its OSO gas fields but the liquids stripped from the rich gas, including LPG, is exported for revenue.
Likewise, the Chevron operated Escravos gas-to-liquids (EGTL) plants in Delta State produces a range of huge volume clean fuels including LPG which are also exported for cash.
Other gas processing plants in the country are operated by Platform Petroleum and Nedogas respectively, and their output is already supplied to the domestic market. Platfrom is also driving a plant expansion project to add volumes to its overall dry and liquids gas output in Western Niger Delta area.
Shell and Seplat separately drive similar 300 million standard cubic feet per day processing capacity development at contingent sites in Asa North and Ohaji (ANOH) field in Eastern Niger Delta. At completion, the two sites will come up with combined 700 MMscfd processing capacity expected to pump out significant volumes of LPG into the domestic market. Seplat is also pushing separate gas programme that would nearly double its existing capacity in the Oben area of Niger Delta.
“We will continue our quarterly domain specific engagements (DSE) with key stakeholders, and on-demand engagements with other relevant parties to address ongoing and emerging concerns,” Engr Ahmed stated.
He added that the “NMDPRA is also working with relevant stakeholders to implement new policies on safety and compliance, especially in the CNG space, which is still in its infancy stage.”
