Nigeria’s a Sizeable LPG Exporter, But Most of its Consumption is Imported

By Foluso Ogunsan

Chevron and ExxonMobil are still exporting Nigerian produced LPG

Nigeria exported 700,000Tonnes of Liquefied Petroleum Gas (LPG) in 2022, even as it grappled with inadequate local production to satiate domestic demand.

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

Only 600,000Tonnes of the 1,4Million Tonnes consumed, was locally produced, NMDPRA says.

As the government scrambles for more domestic LPG output to meet its target demand of 3Million Tonnes for 2023, the question is “why export all that LPG only to import more of the same products”?

One answer is that most of what is locally consumed is Butane, while the variant of LPG that is exported is Propane. The 700,000Tonnes of Propane exports left the country from processing plants run by Chevron and ExxonMobil.

Nigerian authorities aim to reduce all LPG exports to the barest minimum.  “We now need those volumes for sure” says Dayo Adesina, Programme Manager, National LPG Expansion Implementation Plan in the office of the Vice President. “Even the Propane is needed for Autogas, power generation and other sources of energy. Obviously, butane is for cooking”.

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

Adesina: “We need to know what you’re ready to do, what your challenges are, where we can intervene”

Talks are ongoing with Chevron and ExxonMobil on the modalities of retaining all LPG volumes in country. “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 explains, disclosing that one of the companies was “ready to free up 34,000Tonnes a month, (meaning 408,000Tonnes a year), but then the specification (to convert from Propane to Butane), you need to have a splitter on the receiving end”.

Adesina, himself a keen player in the LPG market and a former president of the Nigerian LPG Association, invited stakeholders for a round table discussion on midstream processing of gas on February 9, 2023. His guests included representatives from some E&P companies, including Seplat Energies, Heirs Holdings, Pillar Oil and First E&P; all of whom he challenged to either include LPG in their (planned or ongoing) gas production mix or boost its production in the mix;  NLNG Ltd;   Standard Chartered Bank and Africa Development Bank AfDB), two ranking financiers  who he sought to convince to put more investment into LPG production;  NMDPRA – the regulatory agency focused on LPG market opportunity whose representatives were there to clarify regulatory issues and explain government’s goals; a host of energy consultants including  Argus and Energy Culture as well as a Climate Accelerator expert.  At the session were two representatives of the Nigerian Bureau of Statistics, one of who canvassed vigorous arguments about incentives for choice of butane over kerosene.

Adesina told his guests: “By the time we leave here we should be able to say we have agreed on a Million Tonnes, 2Million Tonnes, half a Million tonnes, less or more over what we are producing now. We need to know what you’re ready to do, what your challenges are, where we can intervene, who we can bring forward. Anybody we need to bring we can bring; that’s the advantage of government. We know that foreign exchange is a problem, some agencies are also a problem too”.