Energy transition: NLNG leads stride to gas-powered economy

A cardinal goal of the federal government is to transform the Nigerian economy into a gas-powered economy by 2030.

Ancillary to that is the hope to align the country with the global push for transition to cleaner sources of energy.

To achieve that lofty goal, the federal government adopted gas as the vehicle for its energy transition journey, declaring January 2021 to December 2030 as the Decade of Gas Initiative.

No doubt, the country is blessed with abundant gas resources; 208.62 trillion cubic feet (TCF) of proven gas reserves valued at over 803.9 trillion dollars, and potential upside of 600TCF of gas.

This has fueled the overarching objective of the federal government to utilise the nation's abundant gas resources for socio-economic growth and development.

In order to actualise this objective, it is imperative for the government to leverage the achievements of the Nigerian LNG Company Ltd. in the global Liquefied Natural Gas (LNG) space.

Indeed, experts believe that NLNG, which marked its 33rd anniversary on May 17, has shown by its developmental strides, that the objective is achievable.

Apart from deepening domestic gas utilisation, the NLNG is said to have contributed significantly to the country financially.

According to information on the company's website, it has so far contributed 100 billion dollars to the federal government's coffers, and 6.5 billion dollars in taxes since it started operations.

It also paid 13 billion dollars to the Nigerian National Petroleum Company (NNPC) Ltd. for feed-gas purchase, and 16 billion dollars in dividends to the federal government.

Acknowledging these achievements, the Federal Inland Revenue Service in a statement signed by its Executive Chairman, Mr Muhammad Nami, on May 16, recognised the NLNG as the Most Supportive Tax Payer in the country.

Prompted by this accolade, Dr Muda Yusuf, Chief Executive Officer, Centre for the Promotion of Private Enterprise, told the News Agency of Nigeria (NAN) that the NLNG model should be adopted by the government in other public-private-partnership arrangements.

"The NLNG model has worked very well. It might not be perfect but of all the public private partnership arrangements that we have had, the NLNG model seems to be the best so far.

"The beauty of it is that there is practically no interference or very minimum interference in the management of the place.

"So, there is professionalism in the management, in the allocation of resources, in the recruitment and that has resulted in high level of performance," he said.

Similarly, Mr Nuhu Yakubu, President, Nigeria Liquefied Petroleum Gas Association (NLPGA) and Managing Director, Banner Energy, said the NLNG was a pride to all Nigerians.

"Not only has the NLNG project endured for 33 years but it is a trail blazer for other similar projects that the Federal Government of Nigeria should mirror in the way NLNG is being administered and managed.

"Aside the huge revenue being generated from the NLNG for the Nigerian government, the company has brought human capital development to bear," Yakubu said.

He said Nigerians working in NLNG were thorough professionals who were capable of competing with their peers globally.

Yakubu said the impact being made by the NLNG to deepen domestic gas utilisation in Nigeria could not be overemphasised.

"NLNG has gradually progressed from a 150,000MT intervention to the domestic LPG market to 250,000MT to N350,000MT and now to 450,000MT, which is maxing out their entire domestic LPG production to the Nigerian market.

"It is unprecedented and it means NLNG is meeting the yearnings of Nigerians. It is gauging the pulse of Nigerians and responding to it and we wish other corporations of that magnitude can do the same thing.

"We will be able to close the energy gap that we have in Nigeria because we have pervasive domestic energy poverty and need lot of interventions to address the issue so that at least every home in Nigeria will have access to gas.

"The NLNG intervention in the domestic market has catalysed growth and development in infrastructure on the supply side.

"From 2007 when the NLNG intervention started, we had only one terminal in Apapa, Lagos owned by the Pipelines Products Marketing Company.

"Today we have many privately owned coastal terminals across the country and there is also a lot of capital flow for infrastructure development because of the confidence brought in by NLNG," he said.

However, Mr Michael Umudu, National Chairman, the Liquefied Petroleum Gas Retailers (LPGAR), branch of National Union of Petroleum and Natural Gas Workers (NUPENG), said NLNG needed to do more to ensure supply of LPG in the domestic market.

Umudu said the total amount allocated to the domestic market was insufficient as about 60 per cent of LPG being consumed in Nigeria was imported.

Mr Philip Mshelbila, Chief Executive Officer, NLNG, said the NLNG had for the past 33 years vigorously pursued its vision of being "a globally competitive LNG company, helping to build a better Nigeria.

"Our company has touched lives in significant areas such as economic empowerment, health, education, infrastructure development and sustainable community development.

"Over the years, it harnessed natural gas that would have otherwise been flared, thereby contributing immensely to a cleaner environment.

"And by delivering 100 per cent of its LPG production into the domestic market, it helps Nigerians transition to cleaner cooking fuels."

Also, the NLNG said the ongoingTrain 7 project would help the company increase its allocation to the domestic market.

It said the project was expected to ramp up NLNG's production capacity by 35 per cent from 22mtpa to around 30mtpa.

The company noted that the project would form part of the investment of over 10 billion dollars, including the upstream scope of the LNG value chain, thereby increasing dividends and taxes accruing to the government.

Incorporated as a Limited Liability company on May 17, 1989, the NLNG was set up to harness Nigeria's vast natural gas resources and produce Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs) for export.

The establishment of NLNG is backed by the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act. Cap N87, Laws of Federation of Nigeria 2004.

The law, amongst other things, provides for the guarantees and assurances by the federal government to the company and its shareholders.

The NLNG is an incorporated Joint-Venture owned by four shareholders: the federal government, represented by NNPC Ltd. (49 per cent), Shell Gas B.V. (25.6 per cent), Total Gaz Electricite Holdings France (15 per cent) and Eni International N.A. N. V. S.àr.l (10.4 per cent).

Today, NLNG has a total production capacity of 22 Million Tons Per Annum (mtpa) of LNG and 5mtpa of Natural Gas Liquids (NGLs) from its six-train plant complex.

The company has 16 long-term Sale and Purchase Agreements (SPAs) with 10 buyers and controls about six per cent of global LNG trade.

By the strides of NLNG in its 33 years of existence, and the groundswell of goodwill, many Nigerians, and experts, believe that the company has the wherewithal to lead Nigeria's march towards a gas-powered economy.