Five people died and 40 were injured when a gas tank exploded and sparked a fire in a student dormitory in northern Iraq, authorities said Tuesday.
The blast hit Monday night when a rooftop gas tank leaked at a building housing the student accommodation and a bakery in the Kurdish city of Dohuk.
“The gas leaked, reaching the students’ rooms, and police arrived to evacuate them,” Dohuk’s governor, Ali Tatar, told AFP.
“Unfortunately at that moment, the explosion occurred.
” A student, a bakery worker and three policemen who arrived as part of the emergency response were killed, including the unit’s deputy director, Tatar said.
It was the second explosion of a liquefied petroleum gas tank in Iraqi Kurdistan in less than a week.
Last Thursday, 15 people died in Sulaimaniyah when an LPG tank exploded and caused the collapse of a building.
Following Monday’s deaths, authorities in the semi-autonomous Kurdish region announced a ban on LPG tanks for domestic use.
The Dohuk blast was the latest tragedy to highlight Iraq’s dilapidated infrastructure and lax safety standards.
On November 15 and 17, two fires broke out at Baghdad International Airport.
And in late October at least nine people were killed when a gas tanker exploded in Baghdad.
By NJ Ayuk, Executive Chairman, African Energy Chamber (http://www.EnergyChamber.org)As the executive chairman of the African Energy Chamber (AEC), it’s my honor and my privilege to tell the world the story of Africa’s oil and gas industry – to explain what this continent can do to help power the world and fuel its own future.
But it’s also my mission to talk about African energy poverty and to explain why this continent needs better access to energy now in order to illuminate its own potential and power forward.
To illustrate the issue of energy poverty in general, I’d like to focus on energy poverty in Nigeria in particular.
Within Africa, Nigeria is an interesting subject.
It’s the most heavily populated country in Africa, with more than 200 million citizens.
It surpassed South Africa to become the continent’s largest economy about a decade ago, and its GDP topped USD441.5 billion in 2021.
It has the largest crude oil reserves in sub-Saharan Africa and is typically the largest liquids producer in the region, though output figures have slumped this year due to problems with theft and sabotage.
Likewise, it has sub-Saharan Africa’s biggest reserves of natural and associated gas and is far and away the region’s biggest gas producer.
Nigeria also experiences significant energy poverty, despite these advantages.
As noted in the AEC’s recently released report, “The State of African Energy: 2023 Outlook,” consistent access to modern energy services – that is, steady and reliable electricity supplies – is available to only 60% of the country’s population on average, and access rates appear to be significantly lower in rural areas than they are in urban areas.
And according to World Bank data, about 99.9 million people, or more than 47% of Nigeria’s population, lived in rural areas as of the end of 2021.
That means nearly 100 million Nigerians are living without any true level of certainty that the lights and the electric power that so many in the developed world take for granted will stay on.
I, for one, think they deserve to have that certainty.
They deserve it on human grounds, and their country already has a significant amount of what is needed to provide them with it.
And by that, I mean that Nigeria has gas that it could use to generate power.
What Nigeria HasAs I’ve already noted, the country’s gas resources are the largest in sub-Saharan Africa.
Nigeria has already been shown to have more than 200 trillion cubic feet (tcf) of gas in proven reserves, and government officials believe that the figure could go even higher, perhaps reaching 600 trillion cubic feet (tcf) following additional exploration.
If that prediction comes true, Nigeria will have the fourth largest gas reserves in the world, behind only Russia, Iran, and Qatar.
It will have more than enough gas to meet current demand; it will have enough gas to produce significant volumes of LNG for export while also supporting gasification programs, both on the domestic and regional levels.
But it’s not enough just to have all that gas.
Nigeria also needs the means to make use of its gas.
Without the proper infrastructure, it won’t be able to put its resources to work and will merely have a scattered collection of raw materials.
What Nigeria NeedsIn practical terms, this means that Nigeria ought to have the following:Upstream production facilities for gas.
Midstream gas transportation facilities such as pipelines, including field networks and trunk lines.
Downstream gas-processing plants and production facilities for gas-derived fuels such as liquefied natural gas (LNG), compressed natural gas (CNG), and liquid petroleum gas (LPG).
Downstream gas distribution systems, including town gas networks.
Downstream gas storage depots.
Gas-fired thermal power plants (TPPs) – preferably co-generation plants, as they are more efficient.
Transmission, distribution, and storage infrastructure for the electricity produced by gas-fired TPPs. Smart and secure operational technology (OT) systems that can optimize the flow of data and resources between consumer markets and energy networks I’m not suggesting here that it’s the Nigerian government’s job to provide all this infrastructure.
But I do believe that it’s Abuja’s responsibility to make sure that this infrastructure becomes available.
To this end, I think that Nigeria also needs government bureaucracies that are competent and trustworthy enough to ensure that oil-, gas-, and power-related contracts are only awarded to companies capable of providing the goods and services required within the acceptable parameters.
What Nigeria EnvisionsDeveloping this infrastructure requires the right kind of vision, which Nigeria already has in place: its “Decade of Gas” program is designed to make the country entirely gas-powered by 2030.
When President Muhammadu Buhari rolled out this initiative in March 2021, he indicated that it aimed to make the gas sector the cornerstone of Nigerian economic activity.
By the time the “Decade of Gas” comes to an end, he said, the country will have done the following:Adopted a new oil and gas law to facilitate investment.
Carried out new exploration projects, discovered new reserves, and brought new fields onstream.
Constructed new gas-processing plants and production facilities for LPG and other gas-derived fuels.
Built new export pipelines and constructed new production trains at gas liquefaction plants such as Nigeria LNG (NLNG).
Constructed new domestic pipelines along routes to serve local customers plus gas-fired thermal power plants (TPPs) to increase domestic electricity supplies.
Expanded domestic power transmission and distribution networks, especially in rural areas.
Nigeria still has a significant amount of ground to cover before it achieves all of these targets.
However, it has made progress.
The biggest example of this is the Petroleum Industry Act (PIA), which Buhari signed into law after it passed both houses of the National Assembly.
The Nigerian government is also successfully promoting LPG, a gas-derived fuel, as a replacement for wood and charcoal as cooking fuel.
(According to NLNG, domestic LPG consumption has climbed by around 1,000% over the last 14 years.)And as recently as this November, Nigeria moved closer to building its first floating liquified natural gas (FLNG) facility.
Nigerian company UTM Offshore signed a front-end engineering design (FEED) contract to design the facility with JGC Corporation, Technip Energies, and KBR.
Chief Timipre Sylva, Minister of Petroleum Resources, Nigeria, described the project as a step in the right direction for Nigeria to develop, exploit, and monetize its natural gas.
During the African Energy Week in Cape Town, Amni International Petroleum Development Company Limited, a Nigerian independent oil and gas exploration and production company and the African Export–Import Bank (Afreximbank) signed an agreement for the provision of a $600 million syndicated reserve-based lending facility.
To a lesser extent, Abuja can also claim credit for the headway it has made on the Ajaokuta-Kaduna-Kano (AKK) pipeline, which is being built to bring gas to the northern part of the country.
When finished, the pipeline will deliver fuel to gas-powered industrial facilities and feedstock to TPPs with a generating capacity of 3,600 MW.
It may also serve eventually as the first leg of the Trans-Saharan Gas Pipeline (TSGP) network, which will allow Nigeria to export gas to Europe via Algeria.
Unfortunately, though, the project has been running behind schedule, and the heavy floods that began hitting many parts of the country in mid-2022 have caused additional delays.
In the meantime, Abuja has also moved forward with plans for establishing another gas export network – the Nigeria-Morocco Gas Pipeline (NMGP), a 5,600-km offshore network that would serve more than a dozen West African states.
This system would, like TSGP, pump Nigerian gas to Europe, but it would also serve the purpose of delivering the gas to regional markets as well.
As such, it would establish Nigeria as a supplier of fuel to much of West Africa.
Thus far, neither NMGP nor TSGP has been built.
But Nigerian authorities are working to hammer out agreements on these projects – and they see the ways that European market conditions have changed since the beginning of 2022 as an incentive to work harder and to work faster.
What Nigeria Could AchieveIf they succeed, they will create infrastructure that could do quite a bit to alleviate energy poverty in Nigeria and beyond.
In the case of NMGP, the construction of this pipeline would provide multiple countries beyond Nigeria with a steady source of gas.
As such, it would serve as an incentive for the construction of TPPs in places where millions of people do not have access to reliable energy supplies.
At the same time, the pipeline’s access to European markets, where buyers are more likely to pay in hard currency, would help ensure the profitability of the whole system.
Likewise, the TSGP network has the potential to benefit Nigeria by ensuring that the country has enough access to hard-currency markets in Europe to cover the costs of the domestic initiatives that depend on AKK – that is, the gas-fired power and industrial projects in the northern part of the country.
Infrastructure Is Needed Throughout the ContinentOf course, energy poverty is not limited to Nigeria; more than 600 million people in Africa lack access to electricity, and nearly 730 million use hazardous and inefficient cooking fuels and technologies.
Nevertheless, while each African country is unique, I hope that this look at Nigeria helps shed light on some of the common challenges facing our continent’s countries — a higher rate of energy poverty in rural areas and the tremendous need for infrastructure development.
As “The State of African Energy: 2023 Outlook” points out, even in the four African countries with a universal electricity rate of more than 70% — Egypt, South Africa, Kenya, and Algeria — access to electricity drops significantly in rural areas, to an average of about 63% of the population, compared to an average of 96% in urban areas.
The situation for rural Africans is even more dismal in other parts of the continent.
In the Democratic Republic of Congo, for example, only about 19% of the overall population has access to electricity and in rural areas, only 1% of the population has electricity.
This will not change until we develop the necessary infrastructure to deliver energy to Africans throughout the continent.
On the brighter side, Nigeria also gives us examples of measures African countries can take to begin addressing these challenges.
No, Nigeria has not achieved its ultimate goal-eradicating energy poverty, but it has plans and initiatives in place with real potential to make a difference — as long as Nigeria continues pursuing them.
If they haven’t done it yet, governments throughout the continent should be developing and implementing multipronged programs of their own to eradicate energy poverty.
They, like Nigeria, should be leveraging their natural gas resources.
They should be developing and executing gas utilization plans, improving their approach to resource management, monetizing natural gas to help pay for infrastructure projects, and launching more gas-to-power initiatives.
Instead of being daunted by the vast numbers of Africans without electricity, shrugging our shoulders, and giving up, I hope that we will be steadfast in our determination to make energy poverty history by the end of this decade.
For a complete look at our recommendations and “The State of African Energy: 2023 Outlook,” download our report here (https://bit.ly/3goAZzK).
- Kenya's liquefied petroleum gas (LPG) consumption is rising as consumers seek alternatives to high oil prices, a government official said on Friday.
Daniel Kiptoo, director general of the Petroleum and Energy Regulatory Authority, told reporters that current per capita consumption by domestic and commercial users is 8kg compared to 7.5kg last year.
"The government is implementing a series of interventions so that we achieve a target of 15kg per capita by 2030," Kiptoo said in Nairobi, the Kenyan capital, adding that the East African nation wants to stop relying on firewood. , coal or kerosene and adopt clean fuels for cooking.
According to the energy regulator, Kenya is totally dependent on imported LPG as there is currently no local production. Kiptoo noted that one strategy to boost LPG consumption is to increase the number of import terminals along the Indian Ocean coast to increase competition among industry players.
“There are nine privately owned LPG import terminals that are in various stages of development and will soon be licensed,” he said.
He added that to further reduce the retail price of LPG, imports will be made through an open bidding system. ■
- Four people were killed and 10 others injured Thursday in a gasoline tank explosion at a house in Sulaimaniyah province in Iraq's semi-autonomous Kurdistan region.
Governor Haval Abubakir told a news conference that a huge explosion occurred due to a leak from a liquefied petroleum gas (LPG) tank used to heat a house in the Kaziwa neighborhood of the provincial capital of the same name, Sulaimaniyah. .
The blast destroyed the three-story house, killing four people inside and injuring 10 others, Abubakir told reporters.
The death toll could rise as more than 20 people were in the building during the blast, some of whom are believed to have been trapped under the rubble, it added.
Meanwhile, local authorities have already launched an investigation into the incident. ■
President Muhammadu Buhari has expressed delight as he witnessed signing of the Memorandum of Understanding (MoU) between Nigerian National Petroleum Company Ltd and Daewoo Group for the rehabilitation of the Kaduna refinery.
Mr Femi Adesina, the President’s Special Adviser on Media and Publicity, confirmed this development in a statement on Thursday in Abuja.
Adesina said the president was particularly excited as the signing came against the back of ongoing rehabilitation works at Warri refinery by same Daewoo Group of South.
According to the presidential aide, the Warri refinery rehabilitation works, when completed, will at the first instance, deliver fuels production before the first half of 2023. Adesina quoted the Nigerian leader as saying: “Daewoo Group has massive investments in the automobile, maritime and other sectors of our economy.
”I am also aware that Daewoo is currently engaged in the execution of the NLNG train seven project and also constructing sea-going LPG vessels for NNPC and her partners.
” The president said he looked forward to the delivery of ongoing projects, especially at the Warri and Kaduna refineries, and the NLNG Train Seven.
”This no doubt will open many more windows of opportunities for Daewoo and other Korean companies in Nigeria.
“I thank you for your faith in Nigeria,” Buhari told the Korean conglomerate at the end of the significant ceremony on the last day of his visit to the Asian country to attend the First World Bio Summit.
The News Agency of Nigeria reports that President Buhari is expected back to Abuja from Seoul, South Korea, on Thursday night.
The Nigeria LNG Ltd. (NL has called on stakeholders in the domestic Liquified Petroleum Gas (LPG) value chain to invest in the supply of the product to ensure reliable and steady supply.
The company made the call in a statement issued by its General Manager, External Relations and Sustainable Development, Mr Andy Odeh, to mark 15 years of domestic LPG supply in conjunction with the Nigerian LPG Association (NLPGA).
The statement quoted the NLNG Managing Director, Dr Philip Mshelbila, as saying that the investment in supply would spark commitment along the value chain, including vertical integrations.
Mshelbila said NLNG would further invest in ‘Train 7,’ which would add about 35 per cent to its current capacity when completed, subject to gas supply and gas quality.
He added that other domestic producers of LPG would need to make investments to enable their product become available to the domestic market, rather than exporting it.
He said the interventions would reduce the switching cost to LPG, encourage more adoption, as well as reduce the cost of funding to support infrastructure expansion and growth as deliberate government action to encourage non-export of LPG by producers.
Mshelbila said other urgent interventions included clarity of regulatory guidelines and requirements, alignment of government enforcement agencies and the widespread dissemination of information on safe practices in the handling and use of LPG.
“Supply and gas gathering initiatives faced major challenges in recent times, and this is due to floods ravaging operational sites of NLNG’s feedgas suppliers,” he said.
He said there had been a state of emergency requiring declarations of force majeure.
The NLNG helmsman, however, assured continued operations at the company’s production plant.
“We continue to load and ship LPG to the domestic market.
“Therefore, we reassure Nigerians of our ongoing operations in the immediate and look forward to an urgent return to normalcy.
“Prior to the flooding, we were contending with the unrelenting effects of crude oil theft, which directly and severely impacted the supply of associated gas to our plant by the upstream producers.
“We recognise the strides being made to address this by the government and its agencies and hope that this will soon translate into improved gas supply to our plant in Bonny,” he said.
Mshelbila said LPG supply was why the NLNG Board of Directors decided to intervene, increasing supply from 50,000 in 2007 tonnes to 150KT to 100 per cent, accounting for about 40 per cent of the domestic LPG (DLPG) market.
“Over the 15 years since 2007, NLNG has played a critical role in deepening the DLPG market with a reliable supply of LPG.
“Expanding access to energy that is cleaner, more reliable, and affordable, the number of its offtakers increased from seven at the onset to 42 today.
“The LPG ecosystem witnessed exponential growth across the value chain,” said Mshelbila.
He added that with the increased DLPG penetration and accessibility, there had been a remarkable reduction in the use of kerosene, firewood, and charcoal.
He explained that this reduced the risk of respiratory conditions associated with smoke inhalation and increasing alignment with the global drive for a cleaner environment and lower GHG emissions.
“Today, the Nigeria Liquefied Petroleum Gas Association (NLPGA) in collaboration with Nigeria LNG Ltd. (NL is celebrating the 15th anniversary of uninterrupted supply of domestic LPG in the country.
“The intervention has seen the supply of LPG grow from 60,000MT in 2007 to over a 1.3million MT in 2021 (a growth of over 1,000 per cent).
“Today, the Nigerian LPG market is adjudged the fastest-growing globally.
“This scheme has encouraged massive investments in LPG infrastructure and has created over 150,000 jobs in the sector and resultant increased tax revenue for the government,” he said.
According to him, the Federal Government’s Decade of Gas programme has further helped in driving interest in propane, evidenced by NLNG’s startup of domestic propane, which witnessed its first delivery in September 2021. “NLNG has invested in a 13,000MT dedicated LPG carrier and security escort vessels facilitating efficient deliveries to Lagos and Port Harcourt terminals.
“It invested in the refurbishment of the Lagos receiving terminal improving coastal delivery of LPG.
“It has also invested in throughput capacity at the Port-Harcourt stockgap receiving terminal,” he added .
He congratulated NLPGA for supporting and sustaining the value chain for 15 years.
NLNG is owned by four Shareholders, namely: the Nigerian National Petroleum Company Limited (49 per cent), Shell Gas B.
V. (25.6 per cent), TotalEnergies Gaz & Electricite Holdings (15 per cent) and Eni International N.
l (10.4 per cent).
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says it will spearhead programmes that prioritise adoption of cleaner cooking fuels such as Liquefied Petroleum Gas (LPG).
Mr Farouk Ahmed, the Chief Executive Officer, NMDPRA, said the authority would also adopt technology to support Nigeria’s objective of achieving universal access to affordable, sustainable and modern energy by 2030. Ahmed made the remarks at the 16th Oil Trading and Logistics Expo in Lagos on Monday.
The News Agency of Nigeria reports that, the event, which is part of the Downstream Week, is titled.
“Regulating Downstream Energy Transition in Dynamic times.
” He said the authority would facilitate accelerated development of all key initiatives and projects that would guarantee optimal supply of gas from the abundant natural gas resources of Nigeria.
Ahmed pledged that the authority would work with key stakeholders to unlock the huge demand opportunities for use of gas in transforming the economic fortunes of the country.
He said the authority would also leverage the provisions of the Petroleum Industry Act (PIA) to spur gas development.
According to him, this will include concessionary royalties on domestic gas supply, concessionary tax regime for domestic gas infrastructure and co-financing of strategic gas investments.
“We will develop an investor friendly economic model for the domestic gas market by promoting the use of LPG as a cleaner cooking fuel alternative to biomass.
“Recent research has demonstrated that transition to LPG for clean cooking reduces air pollutants and overall global temperature reduction by year 2040,” he said.
Ahmed said: “However, today that dominance is being aggressively challenged by renewable energy sources.
“We are currently experiencing major developments in energy supply globally, with discussions on energy demand rapidly evolving and rallying around the need for energy supply to be guaranteed through cleaner and more sustainable sources.
“These discussions have metamorphosed into a compelling strategic case, which has emplaced another energy transition in this century,” he added.
The CEO said it was in the light of the current realities that all stakeholders in the energy sector and more specifically the downstream must ensure that the sector was properly positioned for enhanced performance.
He said this would entail the optimisation of technology, petroleum product quality upgrade, regional markets integration, HSE assurance, human capital development and strong regulatory enablement.
The NMDPRA boss said the authority was addressing the issue of fuel quality through strategic collaboration with key stakeholders in the petroleum products value chain such as Netherland Human Environment and Transport Inspectorate (ILT).
He said authority was also collaborating with NNPC Ltd., Standards Organisation of Nigeria (SON) and the Nigeria Customs Service (NCS).
“Our collaboration with the Nigerian Customs Service led to the suspension of import license for land border importation of petroleum products in order to eliminate sharp practices and enhance quality control.
“Further collaborations with NNPC Ltd., SON, NCS, Nigerian Society of Chemical Engineers (NSChE) and other key stakeholders on improving the standards of fuel utilised in Nigeria will continue,” added.
He said the strategic focus and scope of OTL Africa’s activities, which covered promotion and development of businesses, policies and operational relationships in the downstream energy value chain was highly commendable.
Also, Mr Mustapha Abdul-Hamid, the Chief Executive Office, National Petroleum Authority, Ghana, said projects such as Dangote’s 650.000 barrels per day refinery meant a breakthrough for the West Africa region when operational.
Abdul-Hamid said the Ghanaian government was also developing a 60 billion-dollar petroleum hub project on 20,000 acres in the western part of the country for storage and marine facilities.
“All the above-mentioned projects will help accelerate the petroleum hub, consisting of refineries, petrochemical development of the continent’s oil and gas resources, by connecting the downstream to the upstream.
“It will promote cleaner fossil fuels and biofuels as the pathway to a just energy transition.
“Gas has been accepted as the transition fuel because gas is the least carbon emitting fossil fuel.
“Therefore, Compressed Natural Gas (C as a transportation fuel for example should be promoted in the downstream.
“The use of Liquefied Petroleum Gas (LPG) as a cleaner cooking fuel should also be encouraged,” said Abdul-Hamid.
According to him, Ghana will soon commence the implementation of the cylinder recirculation model to aid the increase of LPG use from 38 per cent to at least 50 per cent of households by the year 2030. “We should support the reduction of sulphur in our fuels and harmonisation of fuel specifications across the continent as being promoted by the African Refiners and Distributors Association (ARDA).
“We should also look to promote the domestic production and consumption of biofuels such as ethanol, either as a blend into fossil fuels or for direct consumption.
“Ghana for example has a policy that allows transportation fuels to be composed of biofuels up to 10 per cent.
“Also, as part of the country’s transition plan, ethanol as a cooking fuel will be promoted,” he added.
He said government regulations played a vital role in ensuring that the implementation of a just transition where there were no drastic job losses and no stranded oil and gas assets on the continent.
He said regulations and incentives led to greater innovation, and in turn, allowed companies to commercialise more rapidly oil and gas assets.
“We must, therefore, steer our countries towards low carbon economies and net zero energy sector, but prioritise economic growth and development in the process.
Vice President Yemi Osinbajo says the Federal Government looks forward to partnering with energy companies and other key stakeholders around the world in delivering its Energy Transition Plan(ETP).
Osinbajo’s spokesman, Laolu Akande, in a statement on Saturday in Abuja, said the vice president received a delegation from Siemens Energy led by its Chief Executive Officer, Christian Bruch, at the Presidential Villa.
According to the vice president, Siemens Energy has shown itself to be a good partner with the Presidential Power Initiative.
He reaffirmed that gas would be necessary for Nigeria’s transition.
“And a lot more can be achieved if we work together with the groups and teams we have already, to take this forward.
“We have gas and it is not just an answer for power, but also for clean cooking.
“Clean cooking is a major component of our National Development Contributions and we are trying to transit from rural areas where kerosene is used, where firewood is used to Liquified Petroleum Gas(LPG).
”Osinbajo said that besides technical discussions in implementing the plan, there was need for political discussions.
According to him, such discussions are why COP-27 is important.
” For African countries, we have the Kigali Communique which addressed many of the important issues for us.
“One of the important issues is that energy access is key.
“We can’t talk about net-zero by 2060 without addressing the fundamental question of energy access for millions of our people who don’t have access.
“This is tied to poverty and development.
”Osinbajo acknowledged that Siemens Energy’s expertise and technology would be helpful in the process Nigeria was undergoing.
“We look forward to collaborating with Siemens and your cooperation would be appreciated.
” he said.
In his remarks, Bruch sought to work with Nigeria on the ETP and applauded the vice president’s role in championing plan.
He said that Siemens Energy was fully committed to supporting Nigeria’s discussion on energy transition.
Bruch added added that the company had a lot of technology to bring to the table with around 26,000 patents around technology.
“Energy transition is a relatively complex matter which combines affordability, sustainability and security of supply.
“We have learnt that every region and every country must have a different plan because conditions are different.
” Diversity in the plan is required, also diversity of solutions.
“There is no silver bullet to drive the energy transition; it requires people coming together to discuss plans and solutions,” he said.
Other members of the delegation included the Minister of Power, Engr. Abubakar Aliyu, Nigerian Ambassador to Germany, Yusuf Tuggar and the Director-General, Climate Change Council, Dr Salisu Dahiru.
From Siemens’ Energy, Ms Nadja Haakansson, Managing Director for Siemens Energy Hub Africa, Seun Sulieman, Managing Director for Siemens Energy Nigeria, Sean Manley, Project Director for the Presidential Power Initiative as well as other top executives.
The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has cautioned Nigerians against panic buying of Liquefied Petroleum Gas (LPG), cooking gas, as a result of the force majeure declared by Nigeria Liquefied Natural Gas Ltd. (NL.
Its president, Mr Oladapo Olatunbosun, made the appeal in a statement on Saturday in Lagos, against the backdrop of NLNG’s declaration of force majeure on its gas facility due to flooding on Monday.
Olatunbosun said cooking gas consumers should not panic over a possible scarcity of the product as a result of the force majeure.
The News Agency of Nigeria reports that force majeure is a common clause in contracts, which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties occurs.
The circumstances include war, strike, riot, crime, epidemic or sudden legal changes, which prevent one or both parties from fulfilling their obligations under the contract.
The president reiterated that, “based on information reaching the association; NLNG has not shut down its production facility in Bonny as rumoured.
” He confirmed that NLNG on Oct. 20 had shipped a cargo of LPG for the domestic market.
He said the dedicated vessel for shipment of LPG from the NLNG Plant in Bonny, “Alfred Temile,” arrived in Lagos on Oct. 20 to discharge product.
“The public should know that the supply of LPG from NLNG has not stopped.
“We should not give opportunity for further price hike due to speculated shortage of the product.
“We are already in hard times with the war causing upset in the markets and the scarcity,” he advised.
He said NLNG had assured the association that it would keep producing LPG based on the feed-gas it received from its gas suppliers, adding that production was expected to pick up after the flood receded.
He, however, cautioned middlemen in the value chain not to take advantage of the hysteria in the market as a result of the flood, which had also hampered the distribution of the production across the nation.
He called for urgent intervention by critical stakeholders to grow the industry and for more investment to meet demand and crash the price.
Similarly, the General Manager, External Relations and Sustainable Development, NLNG, Mr Andy Odeh, in a statement urged Nigerians on the need not rush to fill their gas cylinders as there was enough quantity of LPG to satisfy the market.
Odeh said the flooding or force majeure declared had no impact on availability of LPG.
The NLNG accounts for 40 per cent supply of gas in the domestic market and in recent times has been the sole supplier for the domestic market.
Odeh, further explained that the company’s plant was in operation at a limited capacity, due to reduced gas supply from some of its upstream gas suppliers.
“None of NLNG’s assets on Bonny Island or in any of its host communities are impacted by the flood.
“The force majeure is as a consequence of a similar notice by upstream gas suppliers due to the impact of flood on their production facilities.
“NLNG continues to monitor the situation with upstream gas suppliers and is evaluating the impact of the flood on its business,” he said.
He assured that the firm was working with all critical stakeholders to mitigate the impact on product deliveries.
NAN also reports that price of cooking gas across the Lagos metropolis is relatively stable as cooking gas still maintains its price range of between N9, 400 and N11, 000 per 12.5kg cylinder.
The Liquified Petroleum Gas Retailers (LPGAR) says the shutting down of the Nigeria Liquefied and Natural Gas (NL processing plant may lead to increase in cooking gas price.
Mr Umudu Michael, National Chairman, LPGAR, branch of Nigeria Union of Petroleum and Natural Gas Workers (NUPE, told the News Agency of Nigeria in Lagos on Tuesday that the declaration of force majure on LPG plant by NLNG posed scarcity threat to Nigerians.
Michael said: “There is high tendency that the situation will lead to LPG scarcity in the country or a rise in the price owing to possible resort to importation.
“This means that LPG marketers will depend more on LPG importers having depots in Lagos.
” NAN reports that the NLNG in a statement on Oct. 17 by its General Manager, External Relations and Sustainable Development, Mr Andy Odeh, declared force majeure on its 22 million tons per annum (mtpa) processing plant, due to widespread flooding that disrupted gas supply to the company.
Force majeure is a common clause in contracts, which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties.
The circumstances include war, strike, riot, crime, epidemic or sudden legal changes, which prevent one or both parties from fulfilling their obligations under the contract.
The retailer, however, consoled those who had lost their loved ones in the ravaging flooding in the country as well as those whose means of livelihood had been affected by the flood.
“I also sympathise with millions of Nigerians who have been rendered homeless as a result of the flooding who are now living in refugee camps and those stranded in isolated areas.
“The flooding is a disaster and it is expected to affect LPG production, supply and distribution in Nigeria.
“It is very unfortunate because when natural disasters such as the ongoing flooding in the country leads to such force majeure by a major LPG production company, the impact can be enormous in the market,” said Michael.
According to him, the implication is that no one can say for sure the extent of damage caused by the flood and when it will recede, thereby leaving the LPG market in a state of uncertainty.
“This is really a bad time for the Nigeria’s struggling LPG sector,” he said.
Michael said the impact was already being felt seriously in the Northern part of the country because of the difficulties in moving products across the flooded areas, especially the Lokoja-Abuja road, which is affected.
“Even within the Southern part of the country, the West-South road within the Niger Delta region is impassable, especially at the Bayelsa and Rivers States portions of the road.
“It is very challenging because natural disasters can hardly be controlled by humans, especially in this clime where intervention mechanism is very poor.
“Of course, there is high tendency that the situation will lead to LPG scarcity in the country or a rise in the price owing to possible resort to importation,” he added.
Michael also said lack of transparency in the pricing system between NLNG and its off-takers could fuel a further price hike.
He recalled that the intervention of NLNG in the country’s LPG market was brokered by the Federal Government about 15 years ago.
“Therefore, it is not patriotic for NLNG to be keeping the price secret.
“This is a big barrier to the affordability of LPG for Nigerians and of course, the benefiting off-takers are enjoying the secrecy.
“Another issue is selling the product in US dollars.
I don’t know why what is produced in the country should be sold in foreign currency.
“It is not proper.
If it is true that the Federal Government has about 49 per cent share in NLNG, then government should equally have a duty to influence what happens in the company without undermining the interests of other investors,” he said.
He said: “I think naira remains our legal tender in this country and government has the duty to enforce it.
“Again, it is obvious that NLNG, even at its 100 per cent of LPG production capacity cannot presently meet the domestic demand, hence importation by the major companies such as NIPCO.
“It appears that the importers take advantage of this gap to peg prices based on the importation cost even when most of the product is supplied domestically by NLNG.
“I will advise NLNG, as a matter of national service, to try as much as possible to continue with its regular supply if it means adjusting its enabling facilities in view of the impact of the flooding.