Uncertainty over stable supply has led some in the country's LPG industry to rethink their demand growth projections, writes Adebiyi Olusolape
Nigerian LPG market participants recently backed domestic demand to reach a new high of 2mn t this year thanks to the emergence of cheap supply from the 650,000 b/d Dangote refinery. But technical issues following maintenance at the refinery in August-September may have knocked these hopes off course, creating supply uncertainty over the final quarter of 2025.
The Dangote refinery's 285,000 b/d residual fluid catalytic cracker (RFCC) — which produces LPG — came back on line in early October, company spokesman Anthony Chiejina said on 10 October, confirming local sources that had pointed to LPG sales resuming. The unit remained shut down in September and the start of October after a two-week planned shutdown in August. Dangote's total products supply for the domestic market stood at about 126,000 b/d, downstream regulator NMDPRA said on 9 October, adding that Nigeria needs to develop strategic stocks to "provide a buffer against major supply disruptions". The refiner supplied about 155,000 b/d in July and 179,000 b/d in April, NMDPRA data show.
Dangote can provide about 9,500 b/d, or nearly 300,000 t/yr, of LPG for the domestic market, reserving 19,500 b/d for its 840,000 t/yr polypropylene (PP) unit, the firm says. But it has supplied as much as 17,400 b/d this year because the PP unit is yet to start up. LPG sales averaged around 11,000 b/d in the first half of the year, market participants say.
A truck drivers' strike on 8-10 September over Dangote's resistance to unionising its drivers and another by oil workers on 28 September-1 October when the refiner laid off 800 staff have also disrupted sales. The unplanned downtime and strikes drove LPG distributors that had abandoned buying from Lagos-based Pan Ocean's Ovade gas processing plant, which produces about 2,200 b/d of LPG, this year to return in August-September, pushing loading waiting time at Ovade from two days to four weeks. Nigerian LPG import terminals have also reduced purchases owing to growing competition with Dangote, terminal operator Rainoil Gas' managing director Emmanuel Omuojine says. And state-owned Nigeria LNG, which previously dominated in terms of domestic LPG supply, has also cut its availability on account of lower feedgas intake and price competition with Dangote, Omuojine says.
Only the three largest Nigerian LPG import terminals had product to sell in the first week of October, LPG consultant Godwin Okoduwa says. The still-reduced RFCC operations at Dangote and a backlog of unfilled orders from August has resulted in trucking rates from the refinery increasing to four times longer than the 45 minutes/truck at coastal terminals, Okoduwa says.
Export paradox
The supply headache comes just after Omuojine told a conference held by Nigeria's last-mile distributors association NALPGAMin late September that Nigeria's LPG demand would reach around 2mn t in 2025 for the first time. The supply shock has knocked that projection off, he now says. Domestic LPG consumption could have increased to around 2.5mn-2.6mn t this year had it not been for the continuing export of supplies along with other issues, another terminal operator AYM Shafa's gas director, Teryima Toryila, said at the event.
Nigeria introduced a conditional ban on LPG exports and a plan to develop facilities to "blend, store and deliver LPG domestically within 12 months" from 1 November 2024. But 11 cargoes averaging 27,000t have been exported from state-owned NNPC and Chevron's Escravos joint venture this year, a local industry source says. Toryila said NNPC's plans to domesticate some of these cargoes and make them available for use in Nigeria have stalled. Nigeria's government has . "I don't think we can achieve that by 2030. So, I'll push that to 2032–33," Omuojine says, citing the supply-side challenges.
