The Nigerian Liquefied Natural Gas NLNG Company sets aside 150,000Metric tones of Liquefied Petroleum Gas (LPG) for the domestic market. Of these, the six offtakers selected by the company can only access 70,000Metric tones, due to insufficient loading jetty/harbour infrastructure.
Any company who can find a solution around this inadequacy becomes a prime player in the Nigerian LPG business. NLNG is talking to one company, which it’d prefer not to name.
Nigeria has the capacity to utilize much more than 70,000MTPA.
The NLNG feels that its intervention has allowed a shrunk market to bounce back to life. For all the investment that the six offtakers -LeGlobal, Chimons, Hyson, Harig, Linetrade and Greenfield- have mae, there are still significant gaps in the supply chain.
The following is essentially a repeat of an article by Charles Osezua, previously published in the Vpolume 7, No 6, edition of this magazine, but the gaps have only been very slightly closed...
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The Nigerian Liquified Natural Gas (NLNG) Ltd has the capacity to supply 150,000 metric tonnes(MT) per annum of LPG to the Nigeria market.
For this modest aspiration, the country would require 225 trucks, 180 bottling plants, 5.8million cylinder requirements, and 96,000 bottles/day cylinder bottling capacity. But out of the 225 trucks so required , only 131 trucks are available. Of the 5,800,000 cylinders required only 80,000 are available. There are just 50 working plants the country, out of the needed 180 plants, and of the 96,000 MT daily bottling capacity plants, only 18,000MT daily bottling capacity is accessible.
What all these shortfalls mean is abundant opportunities in the Nigerian LPG market. They include:
*Inland production facilities from Natural gas fields
*Jetty/Harbour development for coastal depot facilities around Lagos , Badagary, Warri, Bonny, Port Harcourt, Eket, Calabar, etc
*LPG cylinder manufacturing or Importation
*LPG accessories supply and distribution
*Pipeline transportation from the coastal depots to inland depots
*Rail transportation from the coastal depots to the inland depots and bottling facilities
*Financial services and project funding.
Trucking Opportunities
Product Transportation: In the absence of pipeline infrastructure, road trucking remains the main means of distributing LPG nationwide.
Trucking: (No of trucks available is estimated at about 131; and about 225 trucks would be required n a weekly basis to lift the projected volume of 450,000 MT. Other opportunities exist for guaranteed cargo or time charter.
Opportunities-Bottling Plant
Only about 25% of the 200 bottling plants available in the country(meaning those registered with the Petroleum Products and Manufacturing Company PPMC) are operating above 40% capacity. Another 20% have been offered for sale
Seven ( 7 ) companies account for more than 50% of the working plants
Oando 9
Total 8
Le Global 2
Nidogas 2
City Gas 2
Vineegas 2
African Petroleum 2
Opportunity exist for new build or buy -in for the existing plants and refurbish-to fill the gap of 130 plants
Challenges and Opportunities in the Supplies of Cylinders and Accessories
Supply of cylinders, cookers and accessories depends solely on importation. The process of certification for importation of cylinders by SON is expensive and is made an exception to the SONCAP procedures. Import duty is waived for the LPG products but retained on cylinders, cookers and accessories.This is a major impediment to LPG utilization growth thereby resulting in unaffordable cylinders, cookers and accessories, and utilization of LPG products.
Potential supply gap of 5 million cylinders
Two ( 2 ) plants exists with installed capacity of
NGCC-Ibadan 400,000
MIDAS-Abeokuta 150,000
The market therefore requires over 1,000,000 bottles imported annually assuming plants are reactivated.
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