Nigeria LNG Limited (NLNG) plans to increase its liquefied petroleum gas (LPG) production by 50 per cent by the end of 2027, as domestic demand for cooking gas continues to outpace local supply.
Adeleye Falade, managing director and chief executive officer of NLNG, disclosed this at the completion ceremony of the Asiko Energy Holdings Limited LPG and propane terminal in Ijora, Lagos.
Falade said NLNG produced about 500,000 tonnes of LPG in-country last year, but the volume accounted for only about 40 per cent of Nigeria’s demand.
Based on the figure provided by NLNG, the 500,000 tonnes represented roughly 40 per cent of an estimated 1.25 million tonnes of domestic demand.
“We actually pioneered the introduction of cooking gas into Nigeria in 2005 when we started at 70,000 tonnes, and at that time we had 100 per cent of the market share,” Falade said.
“As of last year, we were already producing in-country 500,000 tonnes of LPG, but guess what? It’s now just about 40 per cent of the country’s demand.”
The planned 50 per cent increase would take NLNG’s output to about 750,000 tonnes, assuming the current production level is used as the baseline.
The expansion comes as Nigeria seeks to increase domestic gas consumption and improve the availability of LPG for households and businesses.
Falade said the country’s challenge was not a lack of gas resources but inadequate infrastructure required to move gas products from producers to consumers.
“While we have the gas, one of the things that is also obvious to us is that we’re a country that is very deficit in infrastructure, and that’s the critical piece that Asiko Energy Holdings is filling,” he said.
NLNG’s board decided in 2022 that 100 per cent of the company’s retained LPG production would be supplied to the domestic market, despite the company’s largely export-oriented operations.
Falade said increased production would need to be matched by investments in terminals, storage and distribution infrastructure to ensure that additional volumes reach consumers.
“While we produce it, we need the likes of Asiko Energy to be able to take it and make sure that it touches the lives of the average Nigerian in a positive way,” he said.
The comments came as Asiko Energy completed an LPG and propane terminal in Lagos with a capacity of approximately 5,000 metric tonnes.
Alex Ogedegbe, chairman of the board of Asiko Energy Holdings, said the project took about 20 years from conception to completion, highlighting the lengthy development process associated with large-scale energy infrastructure.
He said the project demonstrated the importance of collaboration between the government and private sector in expanding Nigeria’s gas infrastructure.
Ogedegbe also credited government support through the Midstream and Downstream Gas Infrastructure Fund with helping to catalyse private-sector investment in the project.
Felix Ekundayo, managing director and chief executive officer of Asiko Energy Holdings, said the terminal was designed to receive a wider variety of LPG supplies, including cheaper products that could be blended to meet specifications for the Nigerian market.
The facility is connected to three of the largest jetties used for LPG deliveries into Nigeria, allowing it to receive cargoes through multiple points.
Nafisa Sambo, divisional head of extractive industries at the Bank of Industry, said the bank had supported the Asiko project for more than five years.
She said the facility would contribute to energy security, job creation and industrial development while supporting greater local value creation.
NLNG’s planned 50 per cent increase could add about 250,000 tonnes to its current LPG output. However, the extent to which the additional supply translates into greater availability for consumers will depend on the development of storage, transportation and distribution infrastructure across the country.