Page 13 - DMEA Week 14 2020

DMEA FUEL DMEA
Nigeria’s LPG consumption plan will cost more than $6bn
NIGERIA
Nigeria’s plan to boost LPG consumption will require more than $6bn in investments.
DAYO Adeshina, the programme manager of the Nigerian federal government’s National LPG Expansion Plan (NLPGEP), has said that the country cannot push domestic LPG consump- tion up to targeted levels unless it invests more than $6bn in infrastructure projects.
Adeshina, who formerly served as president of Nigerian LP Gas Association (NLPGA), told The Nation earlier this week that federal author- ities wanted to see consumption of LPG, also known as cooking gas, rise to 5mn tonnes per year (tpy) by 2023, up from the current level of 750,000 tpy. Demand among residential and agricultural consumers could climb to 2mn tpy and 1mn tpy respectively by 2021, he said.
He also stressed, though, that these goals would remain out of reach if the country could not attract enough investment to cover the costs of establishing the necessary infrastructure. With respect to production, he said, Nigeria needs to spend about $500mn on the construction of facilities capable of extracting LPG from feed- stocks such as natural gas liquids (NGLs) and associated gas. He indicated that Abuja hoped to see private companies such as Seplat Petroleum and international oil companies (IOCs) such as ExxonMobil, as well as state-owned Nigerian National Petroleum Corp. (NNPC), engage in LPG production.
Nigeria will also have to establish distribu- tion and delivery networks capable of bringing LPG to every part of the country, Adeshina said. This will require investments of about $1.5bn in rail, marine and road transportation systems,
he said, adding that some of this sum would go to existing operators such as Nigerian National Petroleum Corp. (NNPC) and Nigeria LNG (NLNG).
Meanwhile, he stated, another $500mn will have to be invested in storage, bottling, man- ufacturing and break-bulk facilities. This will allow LPG to be shipped from production sites to storage units or bottling plants by truck, he explained. Nigerian operators will need to acquire around 5,000 bulk and bridger trucks to serve these facilities, he noted. He named NLNG, Oando and Harig as potential investors in such projects.
Additionally, he said, break-bulk and bottling plants will have to spend another $750mn to buy small LPG cylinders, the equipment needed to transfer fuel into these cylinders and vehicles to transport the smaller cylinders. The country will need around 10,000 trucks to serve 3,000 bot- tling plants. These operations could be attractive investment opportunities for small and medi- um-sized private companies, he said.
Finally, Adeshina stated, Nigeria will have to invest $2bn in equipment and training for end-users of LPG. This sum will cover the man- ufacture of LPG-fuelled equipment for heating, cooking and other activities, automobile conver- sion kits and training and promotional sessions, he explained.
The country would do well to make these investments, he commented, since increased LPG consumption will help reduce greenhouse gas (GHG) emissions. ™
Week 14 09•April•2020 w w w . N E W S B A S E . c o m P13