LPG distribution: Off-takers condemn marginalisation
Admin l Monday, July 29, 2019
LAGOS, Nigeria – Some Liquefied Petroleum Gas (LPG) off-takers, popularly known as cooking gas marketers, have accused the Nigerian Liquefied Natural Gas (NLNG) of marginalisation in distribution of the product in Lagos. Some of the LPG off-takers, who preferred anonymity, made the allegation in an interactive session with journalists in Lagos on Monday.
They alleged that NLNG deliberately restricted supply of cooking gas to Pipelines Products Marketing Company (PPMC) jetty in Lagos which includes NIPCO in the last two years. According to them, NIPCO receives the bulk share and average of 8,000mt for every delivery while other terminal like NAVGAS was denied.
The off-takers said that NAVGAS, the operator of the terminal, had requested for supply on several occasions but got no reason from NLNG on why it could not deliver LPG to their terminal.
The source, speaking on behalf of the marketers, alleged that NAVGAS terminal only received product thrice in the year while PPMC/NIPCO terminal had received over 12 deliveries.
“They have also sent on behalf of other off-takers to receive via NAVGAS facility and still no reason given for not delivering. Traditional delivery in the past has been supply of LPG to the two jetties of NAVGAS and PPMC. This is usually available for NLNG to deliver its product.
“Also, other terminals in the country are unable to receive from NLNG due to low draft which cannot take NLNG vessel (Navigator Capricorn) if fully laden. All terminals including NAVGAS and PPMC/NIPCO, import are to augment domestic supply in the event NLNG vessel is busy delivering to other terminals.”
The off-takers said that there was a table which illustrated the disproportionate delivery of NLNG volumes since the start of the current contract year and expected to end in September.
The source alleged that NIPCO had received a relatively favourable delivery compared to other terminals. The off-takers also alleged that NIPCO capacity was 9,800mt while NAVGAS and PPMC had 11,000mt and 4,000mt respectively.
The source added that the NLNG performance could be increased significantly in spite of the reasons for not delivering regularly into the NAVGAS terminal and with 51 per cent utilisation only. NLNG, however, denied the allegation when contacted the company’s Corporate Communications Department.
Mrs Anne-Marie Palmer-Ikuku, Head, Media Relations of Nigeria LNG Ltd., said the company had been supporting the domestic LPG (DLPG) market since 2007.
Palmer-Ikuku said from the beginning, Nigeria LNG involvement in that market had promoted market competition while encouraging all terminals to provide Third Party Access (TPA) to all credible buyers. According to her, the principle has guided NLNG’s engagement with terminal owners and buyers.
She said; “Today, the significant majority of NLNG off-takers take their volumes through the PPMC jetties which have provided TPA to all interested buyer and are preferred because they are cheaper.
“NLNG as a reasonable and prudent operator honours all its contracts and does not discriminate against any buyers. All Annual Contract Quantity (ACQ) commitments have been met for all buyers without exceptions.
“No buyer has been denied volumes that were committed to them during the contract year. Algasco for instance has taken 23,643.39mt out of its ACQ of 26,000MT for this contract year. This is 90 per cent of its volumes with more than two months to the end of the contract year.”
The manager said NLNG would continue to work with the government, buyers and other industry players to ensure a level playing field for all buyers. This, Palmer-Ikuku said would help continue in boosting the growth recorded in the oil and gas sector of the economy.
