No fewer than 223 investors from within and outside Nigeria have indicated interest in lifting the country’s natural gas liquids, NGLs.
The Nigerian National Petroleum Corporation disclosed this yesterday when it opened the bids submitted by companies at the 2019/2021 Natural Gas Liquids bids opening ceremony in Abuja.
According to the NNPC’s Group Managing Director, Maikanti Baru, the Government plans to enlist reputable and eligible firms to off-take the natural gas liquids for the local and international markets. It also intends to ensure that the selection of off-takers aligns with proven, transparent, and accountable procedures in conformity with the Public Procurement and Nigerian Content Act.
Baru, who was represented by Saidu Mohammed, the NNPC’s Chief Operating Officer, Mr. Baru stated the following:
“In addition to these objectives, it is our intention to sustain transparency in all our processes and select the best off-takers through a robust mix of big international players with strong Nigerian gas sector focus companies to ensure supply reliability and local capacity development. Our intention is to also stimulate investments in gas storage, marketing, and distribution.”
Details of the Bids: About 223 companies submitted bids. According to the NNPC, this marks an increase in the number of bidders compared to what obtained during previous bidding rounds. Although the total volume of bids was not disclosed, Baru said: “I can assure that they are volumes that are beyond the demand of this nation.”
He went further to disclose that the country had been exporting all the volumes in the past. He also stated that the NNPC had dedicated close to 7,000 metric tonnes before and was raising that volume for the domestic market.
Why this Matters: According to Baru, the essence of the bid is to use the proceeds from the bids to develop the Nigerian LPG Market. He said the process is focused on selecting partners who can add value to NGLs market.
“We are not only focused on lifting and sending it out, but we are also focusing on the maximum value within the nation. In other words, we want to use this transaction to propel the LPG market throughout the nation and grow the market to the level that it deserves.”
Nigeria currently ranks as one of the lowest consumers of LPG in the world. This situation has been attributed to the lack of capacity for penetration. The only way to solve the problem, therefore, is to bring in investors who will provide the needed capacity.
Note that a well-developed LPG market will make it possible for the country to better utilise the natural resource. This means more revenue streams for the country.