NLNG says LPG production rises over 1.5mn metric tonnes, begins naira sale

Nigeria Liquefied Natural Gas Limited (NLNG) has announced that its annual production of cooking gas has surged to over 1.5 million metric tonnes by 2023. This significant increase in LPG production comes as NLNG has also commenced supplying LPG in naira, marking a milestone for the company. The Chief Executive of the Nigeria Upstream Petroleum Regulatory Commission, Gbenga Komolafe, revealed that approximately 1,068 oil and gas projects approved between 2022 and last year are currently underway across Nigeria, with an expected investment of about $22.8 billion. To delve deeper into these developments, Ayodele Oni, Partner at Bloomfield Law Practice, shared insights on the implications and progress in the energy sector during a recent interview on CNBC Africa. The discussion began with a reflection on the timeline for the OB3 gas pipeline, a crucial infrastructure project in Nigeria. Dr. Oni emphasized the importance of this project and highlighted the significance of ongoing gas initiatives. He noted that in the past, Nigeria faced challenges due to poor commercial arrangements for gas, hampering the sector's growth. However, he expressed optimism about the current progress, particularly with projects like the OB3 pipeline, which will enhance gas connectivity across the country. Dr. Oni underscored that Nigeria's focus on gas aligns with the global transition towards cleaner energy sources. Shifting the conversation to LPG pricing, Dr. Oni acknowledged that while there have been advancements in LPG production, challenges persist, especially concerning foreign exchange rates. He explained that the pricing of LPG in USD, coupled with currency devaluation, impacts the final cost to consumers. Despite efforts to sell LPG in naira, logistical and forex-related hurdles continue to affect pricing stability. Dr. Oni emphasized the need for sustainable solutions to ensure affordable access to cooking gas for the Nigerian populace. The interview also addressed developments in the oil sector, including a reported 50% drop in petrol consumption in Nigeria. Dr. Oni expressed skepticism about the accuracy of these figures, attributing potential discrepancies to issues surrounding subsidies and product diversion. He critiqued the notion that such a significant reduction in petrol usage could occur without substantial changes in societal behavior or energy consumption patterns. Dr. Oni suggested that while a moderate decline in petrol consumption might be plausible due to factors like remote work trends, a 50% reduction appears exaggerated and raises questions about data integrity within the sector. In conclusion, Dr. Oni highlighted the need for transparent data and governance in the energy sector to address challenges effectively. He hinted at future discussions on petrol pricing trends and market dynamics, underscoring the importance of accurate information for informed decision-making within the industry. As Nigeria navigates its energy landscape, stakeholders like NLNG and regulatory bodies face the dual task of driving growth in LPG production while ensuring equitable access to energy resources for the nation's populace.