Page 12 - AfrOil Week 14 2020

AfrOil POLICY AfrOil
NIGERIA
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 authorities 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 construc- tion of facilities capable of extracting LPG from feedstocks 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 bot- tling 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 bottling plants. These operations could be attractive investment opportunities for small and medium-sized private companies, he said.
Finally, Adeshina stated, Nigeria will have
to invest $2bn in equipment and training for end-users of LPG. 
Nigeria aims to invest in small-scale delivery infrastructure (Photo: Guardian.ng)
 It also alleged that the Ugandan agency’s demands for payment had violated the terms of the East Africa Community (EAC) treaty, cus- toms union and common market protocols.
Additionally, it described URA’s demand for payment of nearly $650,000 worth of import taxes as discriminatory. “The Attorney Gen- eral of Uganda, through its agent URA, issued the applicant with a decision dated January 31, where it made a finding that certain lubricant products imported by the applicant from its parent company’s (Ola Energy Kenya) manufac- turing plant in Kenya did not qualify for pref- erential treatment as originating from Kenya, thus imposing a tax liability of UGX2.48bn ($647,558),” it said.
The EACJ ruled in LOUL’s favour, according to The East African newspaper. It stated that the URA could not collect any of the money it had demanded until the First Instance Division had the chance to begin hearings at a later date.
“Pending the hearing and determination of this application, a temporary injunction is issued restraining the URA from taking any enforce- ment action, including the issuance of agency notices to enforce the impugned decision dated January 31 and the subsequent demand issued onFebruary24,”thecourtsaid.
As of press time, none of the parties involved had said when EACJ might move on to the next stage of the legal process. LOUL and URA have been at odds on this front for about five years.™
Nigeria’s LPG consumption plan will cost more than $6bn
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w w w . N E W S B A S E . c o m Week 13 01•April•2020