Hope rises for LPG supply as NNPC, Sahara Group Vessels commence voyage
Newly-built Liquefied Petroleum Gas (LPG) Vessels, MT Africa Gas and MT Sahara Gas are set to commence operations that will see them berth in Houston, U.S.A to convey their first ever consignment of gas expected to be delivered to the West African coast from March 2017.
Both vessels’ operations are expected to actualise the vision of the Nigerian National Petroleum Corporation which hinges on boosting the availability of the commodity in Nigeria and the West African sub-region.
More importantly, the two vessels will address the lingering challenges of supply, affordability and fraudulent activities of individuals and organisations seeking to adulterate cooking gas due to scarce supply.
MT Africa Gas has already taken the lead, commencing its maiden voyage by sailing towards the Caribbean/US Gulf Region. Sahara Gas is due to follow suit in the coming weeks.
In the light of this development, Industry watchers have commended the Maikanti Baru led NNPC for taking bold steps at tackling the scarcity of cooking gas nationwide.
Experts particularly lauded his giant interventions towards ensuring sustainability, safety and reliability for millions of consumers who depend on the commodity for their daily energy needs.
Considered as a cleaner, much safer and more affordable alternative to firewood and kerosene, the acceptability of LPG in the sub-region has been affected by some challenges over the years.
These hiccups include, but are not limited to low supply and logistics arising from limited to lack of LPG vessels in the region.
The recent unveiling of two LPG vessels, being acquisitions driven by West Africa Gas Limited, a Joint Venture of NNPC and Sahara Group, presents a renewed optimism for what is popularly referred to as cooking gas in the country.
These two vessels, Hulls 8182 and 8183 were christened “Africa Gas” and “Sahara Gas” respectively at a historic naming event in Ulsan, far away South Korea.
The JV is run by two companies, NNPC LNG Ltd, a wholly-owned subsidiary of NNPC and Sahara Energy’s oil and gas trading arm, Ocean Bed Trading Ltd (BVI).
Working through the JV, NNPC’s LPG policy will in addition to improving supply within West African states, check the menace of deforestation in the sub region.
It is expected that in the long run, the growing negative impact of climate change across the globe will be drastically reduced.
Maikanti Baru, group managing director of NNPC while speaking at the inauguration of the LPG vessels in South Korea, said it was “an outstanding achievement” for Nigeria considering the fact “that the Joint Venture between NNPC and Sahara is already recording success stories within a short period having been established in 2013.”
Baru said the NNPC remained committed to ensuring uninterrupted supply of cooking gas as well as the adoption of policies to drive sustainable development across the entire energy value-chain of the nation’s oil and gas sector
The cost of Liquefied Petroleum Gas (LPG) or Cooking gas which used to be between N2,900 and N3,100 now ranges between N4,000 and N5,500 per 12.50 kg cylinder.
Some of the users of cooking gas around the country, especially food sellers have vowed that except the price of cooking gas becomes affordable they would return to their old ways of using fire wood.
One of the operators of LPG, who does not want his name mentioned when asked to comment on the LPG issue, said that the ex-depot price of LPG has reduced but was surprised that retailers have refused to bring down the price.
He said that the government should allow the price of premium Motor Spirit or Petrol to flow freely and not be restricted so that investors can come into the downstream and invest without restriction.
Another source contacted said the retailers still have stocks bought when the prices hit roof prices and were trying to push these volumes into the market to curtail losses.
Two weeks ago, Nigeria LNG released a statement absolving the company of responsibility for scarcity of cooking gas adding that it has delivered 13,000 metric tonnes of LPG which is an equivalent of 1 million 12.5kg cylinders.
“The reality of this is that although LPG is produced and consumed locally, the product like crude oil is an internationally traded commodity with an international price benchmark, open to global demand and supply pressures. The price is invoiced in Naira at the prevailing official interbank exchange rates”, said Kudo Eresia-Eke, General Manager, External Relations, Nigerian LNG Limited, in a company statement.
Eresia-Eke added that NLNG however softens the impact of price variations by continuing to subsidise the cost of transporting about 40 percent of total domestic market share which it supplies from its production facility on Bonny Island.
A source in the NLNG told BusinessDay that turnaround takes about 6 days.
“Government owns the jetty. The receiving facilities in Apapa, Lagos which are multi-use terminals with berthing priority accorded to vessels discharging other oil products (Petrol, DPK and Diesel), so there is nothing we can do but to queue up unless our vessel is given priority”, said the source.
Olusola Bello