NNPC GMD inaugurates Emadeb LPG Plant, vows to crash high price of cooking gas




Newly inaugurated Emadeb LPG Plant in Abuja

Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Limited, Malam Mele Kolo Kyari, on Monday (December 13, 2021) inaugurated Emadeb Energy Services Limited’s 120MT LPG Storage and Bottling Plant in Abuja.

While speaking with reporters after the inauguration, Mr. Kyari, said that the high price of Liquefied Petroleum Gas (LPG) otherwise known as cooking gas was a reflection of the rising price of crude oil and its derivatives at the international market.

However, he assured Nigerians that the NNPC Limited was working round the clock to boost the supply of LPG to ensure a crash of the price that has apparently soared almost out of reach of a vast majority of Nigerians using the product for cooking.

Residents of Abuja now spend between N8,500 and N9,500 to refill their 12kg gas cylinders. The price hitherto was between N4,000 and N6,000.

The soaring price, according to Kyari, would soon crash once the NNPC raised its supply of the product even as he pointed out that the corporation was working hard to boost its supply.

Kyari said: “Two things are at play; one is the supply and the other is the international price of gas. It (price) moves with the price of every other petroleum product including crude oil and its derivatives. So it is a reflection of what is happening in the international market.

“What we are doing is to increase supply. Once supply is increased the prices will come down.”

The NNPC GMD said that the newly-inaugurated LPG plant was going to “reduce the cost of energy for Nigerians for the fact that LPG is cheaper than any other product you can think of, especially as cooking fuel.”

He commended Emadeb Energy Services Limited for building the LPG plant in Abuja, explaining that the project aligned with and fitted into one of the steps the Federal Government had taken to provide gas for its citizenry.

He was upbeat about the company’s plan to, within the next 12 to 18 months, build a similar plant in six different locations countrywide, pointing out that the company had gone into these ambitious ventures in line with President Muhammadu Buhari’s decade of gas initiative.

Kyari said: “We are aware that a lot of institutions and companies are doing this across the country. We are selecting this in line with Mr President’s objectives to make this the decade of gas.”

He also stated on the occasion that one of the many ways investors could key into the decade of gas initiative was to have facilities like this for auto-gas conversion, and also to ensure that LPG is easily accessible by the people.

According to him: “We think this is a very nice step. This company has promised to make six of these facilities available within the shortest period of time. Ultimately, we know this will serve the people within this area. We are expecting more Nigerians companies to come into this.”

Kyari also noted that the global energy transition had made the investment climate very ripe for gas even as he assured those investing in LPG project that the NNPC would guarantee supply of gas to their facilities.

Read him: “We know that the investment climate is very ripe for auto-gas and auto fuel, especially in terms of LPG as a transition fuel globally. So, we know that this is a big market for Nigerian companies and this is one of the great companies (referring to Emadeb Energy Services Limited) that we have around.

“As NNPC, we will come in and we will guarantee supply. That is very important for us as a business. As you are aware, we are NNPC Limited in Nigeria and we also have to make money for Nigeria. We will be there in the upstream to provide the gas.”

He continued: “The gas will be available through many of our initiatives, including all the trucklines we are trying to put in place. So, gas will be available to these companies and entities. Also we can share data with them around customers and how we can deliver gas to our customers.”

Shortly before inaugurating the plant, Kyari had expressed satisfaction that numerous partners were keying into government’s aspirations of providing cheaper gas for the country, pointing out that the development would culminate in tapping from the enormous gas resources in Nigeria.

Kyari said that this would also lead to extensive domestic utilization of gas and export of the product as well as result in energy security, peace and prosperity of the country.

He urged Emadeb Energy Services Limited to count on NNPC’s support in terms of supply and provision of information to promote business investments in the country.

Chief Executive Officer of Emadeb Energy Services Ltd, Mr Debo Olujimi, said that although the capacity of the plant was currently 120MT, plans were afoot to expand it to 240MT in the next 18 months.

He described the business of gas infrastructure as capital intensive, and urged the federal government to encourage private investors to get value for their money.

Olujimi noted that: “There is a lot of value in gas. Everybody knows that gas is the way forward and the way it is, there is much gas with the decade of gas and with over two trillion cubic feet of gas reserve.

“We are about to start developing our asset with about 200 billion cubic feet of gas at the Ibom field. We intend to convert some of the gas processed out of that facility to support the local market.

“It is capital intensive doing gas infrastructure and government needs to encourage private investors so that private people can come in with funds and equipment to get the value.

“In the electricity sector today, the major issues are the shortage of gas and the pricing of gas; those are things that the government has to help us to look at.”

He disclosed that shortage of foreign exchange was also a major challenge in the business. He, however, pointed out that the company had the support of the NNPC and it could produce its gas locally.

The company’s CEO noted that besides supporting the local LPG market, the Emadeb Group would also support gas for power.

According to him, the country’s population would have exceeded 300million “in the next 10 years. It is estimated that 60% of Nigerians will be using LPG.”

He said that he was very fulfilled and happy that EMADEB group “is bringing in clean energy especially to the market and actually to the Abuja market. The environment here is where Abuja lives. The vast population in Abuja is within this vicinity (Lokogoma, Gaduwa, Apo, etc) and that is why we have invested this much here.”

Olujimi stated further: “For us, this a model that we want to build in the downstream industry. Everybody knows the importance of cooking. We all eat food and we have decided to do this as a model for clean energy in Abuja.

“That is why we are here today; we have looked at that when we conceptualized this investment. It is 120 tonnes LPG storage. We have looked at this entire neighbourhood where we have about 56 estates with a minimum of one thousand households living on each estate. We looked at this that it is a good business in terms of return on investment and clean energy.

“Everybody knows the importance of LPG and we want to, in every way, ensure clean environment in terms of retailing LPG and at the same time being able to serve the public in a very conducive environment and this is why we have conceptualized this.

“This project (plant) only serves barely less than two-thirds of the people in this environment-Lokogoma, Gaduwa, Apo Districts and all the estates around here. We decided to say let us take a model here and see how that works.”

He thanked the NNPC GMD for the opportunity that had been given, stating that “we want to see how we can get domestication of gas with the so much resources that we have on the ground in order to bring it up to the market locally so that we don’t have to export all our handlings and so that Nigerian masses will be able to buy cheap and better LPG in the market.

“This is our model and within the next year and a half, we intend doing this in six locations across the country.”

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