LPG Consumers in Nigeria set to say the final good-bye to LPG Scarcity and Unfavorable pricing

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  • Author: Muyiwa Ige(LPG Stakeholder and Consultant)

Millions of LPG consumers in Nigeria, including the fetuses currently residing in their mothers’ wombs, can confidently heave resounding sighs of relief immediately the LPG Processing Plant in the gargantuan Dangote Refinery and Petrochemical Complex in Ibeju-lekki, eventually commences operation.

Contrary to the expectation of the wonderful people of Nigeria, just about 45% of the LPG consumed in the country is sourced from the Nigeria Liquified Natural Gas Plant in Bonny Island, Rivers State.

This unpalatable situation forces outstanding LPG marketers like Ultimate Gas Ltd, Nipco Gas Ltd, Gasland Nig.Ltd, Banner Gas Ltd, Techno Oil Ltd, Chimons Gas Ltd, Matrix Energy Ltd and AA Rano Nig. Ltd, to come to the rescue by importing the 55% balance to effectively bridge the supply gap.

The glaring justification for the bubbling excitement over Dangote’s LPG Processing Plant’s potential impact on Nigeria’s LPG industry is the sheer size of its installed LPG storage capacity, made up of fifteen huge 75,000MT cylindrical tanks.

Nigeria’s stellar LPG Investors with depot storage facilities, namely, Nipco Gas-Lagos(10,000MT), Navgas-Lagos(11,000MT), PPMC-Lagos(8,000MT), Techno Oil-Lagos(12,000MT), Matric Energy- Warri(5000MT), Prudent Energy- Oghara(6000MT), Dozzy-Calabar(10,000MT) and Stockgap- Port-Harcourt(5,650MT), have a combined storage capacity of 67,650MT.

Certainly, one doesn’t need to be a graduate of the prestigious Harvard University or genius like Albert Einstein to safely arrive at the conclusion that Dangote’s refinery with a total installed capacity of 1,125,000MT(more than 16 times the country’s total depot storage capacity) will sufficiently meet the demand of LPG in Nigeria, which currently stands at an average figure of 80,000MT/month.

The rather notorious problem of LPG scarcity automatically rears its ugly head whenever there’s a disruption in the supply of LPG to the depots.

Disruption is majorly attributable to one or a combination of these scenarios: delays experienced by the LPG Vessel in loading the product at the source, piracy attacks in the pirate-infested gulf of guinea and delays in offloading the product at the destination due to jetty unavailability.

In the same vein, the landing cost of the product increases, no thanks to the fees paid for naval escort for its smooth voyage through dangerous waters, ransom paid to pirates for abducted crew members and demurrage incurred when the LPG Vessel is unable to discharge the product at the expected time.

Fortunately, the fifteen humongous LPG storage tanks with multiple loading gantries and state-of-the-art pumping infrastructure at the Dangote Refinery will make it possible for several vessels to load the product simultaneously in a timely manner.

LPG Vessels from within Lagos, Warri, Calabar and Port-Harcourt, have no need to transit through the pirate infested gulf of guinea route, drastically minimizing their chances of being attacked and lowering the landing cost of the product.

Particularly note-worthy is the short distance from Ibeju-lekki to Apapa where the major LPG depots in the country are located; which obviously comes with the dual advantage of reducing the landing cost of the product and ensuring better product order planning that ensures that LPG vessels sail in promptly only when the receiving jetty is available for LPG discharge.

In a nutshell, the good news is that the commencement of operations at the LPG Processing Plant of Dangote Refinery and Petrochemical Company, will usher in a period of constant availability of LPG at very favorable rates for the overall benefit of the good people of Nigeria.