NNPCL moves to boost cooking gas access, to raise supply by 194%
By Innocent Obasi & Habeeb Adamu
…targets 740 distribution centres in 3yrs, 20m cylinders in 5yrs
The Nigerian National Petroleum Company Limited (NNPCL) is targeting to increase its supply of liquefied petroleum gas (LPG), commonly known as cooking gas, in the country by 194 percent to 5 million metric tonnes, from 1.7mmt it supplied in 2021.
To achieve this, the firm is looking to leverage India’s successful LPG models and advancements in the last 10 years.
As such, NNPCL said it would deploy 740 LPG micro distribution centres (MDCs) and 37 filling plants in its 541 gas stations across the country over the next three years.
Mele Kyari, group CEO of NNPCL, who disclosed this at the World LPG Association India-Nigeria Summit 2022 in Abuja on Wednesday, said the firm was partnering with Indian Oil Company (IOC) to achieve the target.
The summit, themed ‘Energizing the future: leveraging the Indian experience’, was to discuss the Nigerian experience and Indian example covering safe LPG handling, pricing and financial support to enhance LPG affordability among the poor, communication strategies, ICT & infrastructure as well as collaboration on cylinder management and manufacturing.
Nigeria has a lot to learn from the Indian experience, said Kyari, who was represented by Adeyemi Adetunji, group executive director, Downstream, NNPCL.
After the Indian government pursued an intensive LPG penetration drive by providing free cylinders, stoves and valves to users in 2016, LPG consumption in the country rose to 99.8 percent by August 2019, from 62 percent in 2016, putting the country’s gas consumption at 30mmt.
Kyari said the firm was also partnering with the Office of the Vice President and other stakeholders to establish Gas Funding Company Limited for injection of 20 million cylinders in the next five years under the Marketers Cylinder Owned Model.
He said that Nigeria has identified its abundant gas resources as fuel for energy transition, which informed the country’s Net Zero commitments by 2060 and the declaration of 2021-2030 as Decade of Gas.
“NNPC Limited is an energy company with new investments in gas, power, and renewables. Key pipeline projects such as ELPS I1, OE5 and AKK to deliver a total of 6.2 billion cubic feet of gas per day to demand nodes across the country are at various stages of completion,” Kyari said.
“We have strong presence in the LPG value chain contributing about 45 percent of domestic supply via JVs (Oso Bonny River Terminal), affiliates (Nigeria LNG Ltd & Ashtavinayak Hydrocarbon Limited) and subsidiaries (NPDC),” he said.
The GCEO said the NNPCL is fully aligned with the Federal Government’s National Gas Expansion Programme (NGEP) and National LPG Expansion Plan Initiatives and has a full-fledged LPG business unit established to commercially drive the national LPG penetration.
He said at the end of discussions, the summit would be required to submit a report detailing gaps identified and recommendations on best practices from Indian experience for adoption in Nigeria by relevant stakeholders to achieve rapid national LPG penetration.
LPG penetration in Nigeria is still relatively low, but the federal government hopes to convert 30 million households to the usage of LPG by the year 2027, Adeyemi Dipeolu, special adviser to the President on Economic Matters (in the Office of the Vice President), said.
“Following the implementation of government’s gas expansion initiatives, and the presidential assent to the PIA, investors stand in good stead to benefit from the vast opportunities available for unlocking Nigeria’s abundant gas resources for shared prosperity,“ Dipeolu said.
Shrikant Vaidya, chairman, Indian Oil Corporation Limited, said LPG is a transformational fuel capable of poverty eradication and eliminating the use of firewood, coal and kerosene for cooking by millions of Nigerians.
Quoting a WHO report, Vaidya said “smoke inhaled by women from unclean fuel is equivalent to smoking 400 sticks of cigarettes in an hour, thus ruining their health“. He added that “by releasing LPG connections directly into their homes, it empowers rural women“.
“Driven by the inspiring stewardship of the NNPC, the Nigerian energy market is also one of the impressive growth trajectories,” he said.