Nigeria is a net exporter of Liquefied Petroleum Gas (LPG); producing an average of 3 Million Tonnes annually (MTPA) and an annual consumption of 400,000MT (FY 2016) - a mere 15% of production. Conservatively, about 85 - 95% of the LPG consumed in Nigeria is primarily for domestic cooking. The current level of national consumption is also a fraction of the annual potential which has been projected at between 1.5 - 2 MTPA and a N380 Billion estimated valuation.
LPG is produced in Nigeria mainly from the refineries and some gas processing centres. At Warri and Port Harcourt refineries, LPG is produced as a light – end product of the crude refining process. Propane, Butane and Mixed LPG are the typical output but only the mixed LPG (with a mix ratio of 70% Butane to 30% Propane) is sold to commercial customers. Furthermore, LPG produced at the refineries are solely for domestic consumption. Sales and allocation of the product are handled by the downstream subsidiary of the National Oil Company (Nigerian Petroleum Marketing Company - NPMC).
Nigerian LNG (NLNG) is the largest gas processing facility in Nigeria. The centre processes wet gas gathered from select proximal oil fields into Natural Gas Liquids and Natural Gas (Liquefied for export). NLNG outputs are 22MTPA of Liquefied Natural Gas, 1.5MTPA of Natural Gasoline and 1MTPA of LPG. The company has a domestic obligation to supply a minimum of 250,000MT of LPG produced to the local market every year, this quantity is being reviewed to 500,000MT due to recent uptick in demand. NLNG caters for about 70% of the supply of LPG to the local market. LPG supplies from NLNG are delivered ex-Ship and priced basis Mont Belvieu non-TET LPG indices.
Other major gas processing centres in the country are Mobil’s Oso facility in Bonny and Chevron’s Escravos facility both of which produce LPG chiefly for the export market. Oso terminal has a bit of its production flowing into the local market as well. A growing quantity of LPG is also imported from the Mediterranean countries for Navgas and NIPCO.
LPG from the local refineries are sold ex-gate on bulk trucks with 20 -25MT capacity. You would require an annual off taker’s agreement with NLNG to receive LPG from their vessel (The Gaz Providence or any of the secondary ones) at one of three storage terminals namely; NAVGAS, NIPCO or NPMC terminals all in Apapa, Lagos. To underscore the dearth of required infrastructure, about 15 off takers share throughput at these three terminals with combined capacity of 16,500MT. Secondly, only three active jetties; the Lister Jetty and the New Oil Jetty (NOJ) and very recently Waziri jetty are available for berthing LPG carriers in Nigeria at the Moment. The Eastern and Northern Part of the Country have no bulk LPG terminals.
The retail market of LPG in Nigeria is highly demarcated. At the top of the retail chain and serving as a primary retail point are the filling plants with capacities ranging between 5 – 60MT. The last available data indicate the presence of about 160 LPG filling plants across Nigeria. These plants help to serve the requirements of the ubiquitous refillers as well as petrol stations.
Typical cylinder sizes are 50, 12.5, 5 and 3kg.The final consumer usually has an option to get their empty cylinder refilled at the plant or at a refiller’s shed or to exchange it for a filled one at a petrol station. Another emergent feature in the retail supply chain is the growing number of mini skid filling plants with capacity no more than 10MT dotting the forecourts of petrol stations.