Market Intelligence
Oil and Gas Nigeria

Nigeria Liquified Petroleium Gas (LPG)

Government projects equating to $6 billion will be devoted to infrastructure investment over the next ten years. 

The Nigerian Government is focusing on ramping up its Carbon Capture Utilization and Storage (CCUS) commitments. This complements the expansion of domestic gas utilization, especially liquefied petroleum gas (LPG popularly called “Cooking gas”) from 500 metric tons per year (MTPA) to 15 million MTPA by 2030. Nigeria’s demand is significantly depressed due to limited distribution infrastructure in many parts of the country. Key focuses for the government are power generation, industries, households, and Autogas, with plans to switch over 60 million households to LPG by 2030 to increase average usage from 750,000 MTPA up to 2 million MTPA. Government projects equating to approximately $6 billion will be required for necessary infrastructure investment over the next ten years. 

According to the Program Manager, National LPG Expansion and Implementation Plan at the Presidency, the government plans to expend an estimated $2 billion on LPG production facilities from natural gas and natural gas streams, $2 billion on distribution and marketing, $750 million on storage, $750 million on bottling plants, and $500 million on consumer infrastructure. This will include a strategy for massive cylinder reinjection into the system that will involve cylinder ownership and recycling model that transfers ownership from individuals to LPG marketers for onward issuance to consumers.

This system will ensure new cylinders equipped with safety and tracking systems are issued to consumers. The first phase of the roll out will involve the procurement of 150 Propane trucks, forecourt equipment for Autogas (including fuel station fuel hoses, gas pumps, gas nozzles, fuel dispenser, tank gauge, car wash, price pole, fuel management and service station equipment), with over $10 million worth of cylinder injection across 12 pilot states of the federation, each with two LPG filling plants and 24 LPG filling stations. 

Under the National LPG Expansion Initiative, opportunities exist in LPG supply, construction of storage and supply depots; cylinder plants and manufacture; fabrication and equipment; cylinder bottling, filling, and refilling; retail and maintenance stations; and infrastructure. All parts of the initiative will require project funding and financial services. 

  • Additional opportunities are present for the development of import terminals, including pier and harbor construction for coastal depot facilities, especially around Lagos, Badagry, Warri, Bonny, Port Harcourt, Eket and Calabar. This is due to inadequate loading facility at the Bonny River Terminal, resulting in low priority accorded to domestic LPG distribution, which impedes evacuation of LPG when available. 
  • Provision of barge-mounted floating LPG storage depots to serve liquefied natural gas (LNG) mother vessels; skid mounted mini plants to cater to small communities such as residential developments; and construction of LPG plants to service vehicles that will potentially use automotive LPG (autogas) as fuel.
  • LPG infrastructure development lie in construction and upgrades of new and old rail lines to enhance domestic distribution
  • Construction of LPG extraction and inland production facilities from natural gas fields. 
  • Distribution/marketing
  • Coastal terminals, rail wagons, autogas conversion kits, trucks
  • Splinter system to convert natural gas liquids to liquefied petroleum gas.

U.S. companies interested in accessing these opportunities are encouraged to contact the U.S. Commercial Service Nigeria for guidance. For more information, please contact CS Nigeria at: Benedicta.Nkwoh@trade.gov.
 

03/24/2022