Nigeria LNG Limited has spent decades building a global LNG business that has generated about $150 billion in revenue and delivered more than 6,000 cargoes to international markets. But one of the company’s most important growth stories is now happening much closer to home.
NLNG supplied roughly 500,000 tonnes of liquefied petroleum gas, commonly known as cooking gas, to the Nigerian market last year, according to Managing Director and Chief Executive Officer Adeleye Falade.
That is a significant change from the early years of its domestic LPG programme, when supply was only a fraction of current levels. NLNG says its domestic supply has grown from around 50,000 metric tonnes in 2007 to more than 500,000 tonnes, enough to meet roughly 30 per cent of Nigeria’s LPG market.
The numbers show how NLNG is gradually becoming more than a company built around exporting Nigerian gas. Its domestic LPG operation is increasingly important to Nigeria’s efforts to expand access to cleaner cooking fuel and build a larger local gas economy.
What NLNG Supplies to Nigeria
NLNG produces LNG for international markets, but it also produces liquefied petroleum gas, including butane used for cooking.
In 2022, the company committed 100 per cent of its butane production to the Nigerian market. NLNG says all of that output is now absorbed locally rather than exported.
The company supplies LPG through selected off-takers using approved coastal terminals, mainly in Lagos and Rivers State. A dedicated LPG vessel also supports deliveries to the Nigerian market.
The importance of that system is easy to miss.
Nigeria has large natural gas reserves, but having gas underground does not automatically make cooking gas available in homes. The gas must be processed, transported, stored and distributed through a network capable of getting the product from producers to retailers across the country.
NLNG’s role sits near the beginning of that chain.
Why 500,000 Tonnes Matters
NLNG started domestic LPG supply at a much smaller scale. Today, the company says it provides about 30 per cent of the Nigerian market.
That makes NLNG one of the most important suppliers in the country.
The significance goes beyond the amount of gas supplied. Greater domestic production can reduce Nigeria’s exposure to imported LPG and create a more reliable base of local supply.
It can also support the expansion of the wider LPG industry, including terminals, transport companies, filling plants, cylinder manufacturers, retailers and other businesses along the value chain.
For consumers, however, the bigger question is whether higher supply can eventually translate into greater availability and affordability.
Nigeria still has millions of households that depend on firewood, charcoal and other traditional fuels for cooking. Expanding LPG consumption therefore requires more than increasing production. Distribution infrastructure, household income and access to safe cylinders and filling facilities also matter.
Why NLNG Stopped Exporting Its Cooking Gas
NLNG’s decision to dedicate its butane production to Nigeria represented a major shift in how the company approached the domestic market.
Exporting energy products can generate foreign exchange, but directing more LPG into Nigeria also serves a strategic purpose.
The company says its domestic LPG programme is intended to make cleaner energy more available, accessible and affordable. It currently uses approved coastal terminals and off-takers to move the product into Nigeria’s retail distribution network.
There is also an environmental argument.
Increasing the use of LPG could reduce dependence on firewood and other biomass fuels, which are associated with deforestation and household air pollution.
That makes cooking gas part of a much bigger energy transition discussion. Nigeria needs to generate export revenue from gas while also ensuring that the resource improves energy access within the country.
NLNG is increasingly trying to do both.
What Train 7 Could Change
The next major change could come from Train 7.
NLNG currently operates six production trains with LNG capacity of about 22 million tonnes per year. Train 7 is expected to increase total LNG production capacity by 35 per cent to around 30 million tonnes annually.
Falade said the project could also increase LPG production by 50 per cent, potentially adding another 250,000 tonnes of cooking gas to the domestic market each year.
If that additional volume reaches Nigerian consumers, NLNG’s influence on the domestic LPG industry could become much larger.
The company would not simply increase its export capacity. It could also become a more important source of fuel for Nigerian households and businesses.
Train 7 therefore matters to both sides of Nigeria’s gas strategy: selling more gas internationally and using more gas locally.
Why Nigeria Still Has a Distribution Problem
Producing more LPG will not solve every problem in the market.
NLNG’s responsibility in the domestic supply chain effectively ends when the product is delivered to approved terminals and handed over to off-takers. From there, LPG must travel through trucks, filling plants and retailers before reaching consumers.
That means infrastructure beyond NLNG will determine how much increased production affects ordinary households.
Nigeria needs sufficient storage capacity, more distribution facilities and stronger transportation networks. Expanding supply into areas far from coastal terminals is especially important if LPG adoption is to grow outside major cities.
There is also the question of price.
A country can produce large volumes of cooking gas and still have households that cannot afford to use it regularly. Supply is therefore only one part of the challenge.
Nigeria also needs a domestic gas market capable of moving the product efficiently enough to keep distribution costs under control.
What It Means for Nigeria’s Gas Economy
NLNG’s international business remains enormous.
The company has delivered more than 6,000 LNG cargoes since operations began and currently has production capacity of 22 million tonnes per annum. Its global operations have helped turn Nigerian natural gas into one of the country’s significant export businesses.
But the domestic LPG story shows another way Nigeria can extract value from its gas reserves.
Instead of viewing gas mainly as something to liquefy and ship overseas, domestic LPG creates economic activity inside Nigeria while providing households with another source of energy.
That distinction could become more important as Nigeria develops additional gas infrastructure.
NLNG has already demonstrated that Nigerian gas can compete globally. The next challenge is making sure more of that gas also changes how Nigerians power their homes, cook their food and build businesses.
Supplying more than 500,000 tonnes of LPG annually is a significant step. But for a country with Nigeria’s gas resources and population, it could still be only the beginning.
