Prudent Energy deepens LPG market with N10.8bn facility
Federal Government efforts at deepening utilisation of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas has further been boosted as the N10.8 billion ($30 million) Prudent Energy 6000 metric tons facility located at the edge of River Ethiop in Oghara Delta State is set to go into full operations soon.
The facility which is currently being test run is strategically located to service the south –South, South -East and some part s of the northern markets. It is also expected to impacts the price of LPG generally in the country as the market would now become competitive.
LPG penetration is about 25 percent in a country with a growing population estimated at almost 200million people. The implication is that there is still huge opportunity to grow LPG consumption.
Commenting on this development, Abdulwasiu Sowami, managing director of Prudent Energy who is also the owner of Forte Oil plc told BusinessDay that there is a humongous opportunity for LPG business in the country with statistics indicating that the population is growing every day.
He said for the past four years the government has been trying to spare head utilisation of LPG through the office of the vice president.
According to him, the government has technically discouraged the Nigerian National Petroleum Corporation (NNPC) importing Dual Purpose Kerosene (DPK) and this has led to the reduction in consumption of the product. He said while interest in LPG has increased infrastructure to support this utilization has not been there as the country currently has a few LPG terminals.
“In our thinking, we thought we needed to make the investment to be able to play and get some millage”
The current government policy he said suggests that there will be a handshake between the government and the private sector, adding that even though there challenges he believes the company will be able to contribute its quota in LPG value chain.
The Prudent Energy boss who said the company is currently getting the product from Tema, Ghana, stating that his company will put- in a bid for Nigerian Liquefied Natural Gas (NLNG) contract so that it can also be supplied LPG.
He said however, looking at the current LPG requirement in Nigeria, NLNG is not meeting 50 percent of the local consumption hence the need to augment with a bit of import.
“We are not part of the NLNG contract as at the time the last contract was renewed. The terminal was not ready. Secondly, NLNG does CIF, they do delivery. We have just put in documents for NLNG to come and inspect our facility so that in the next contract bidding our company will participate. But even at that we still augment with import,”he said.
He also spoke of the company plans to invest in Bitumen as soon as the enabling environment is created. He said even though they plan to invest in Bitumen but they are looking at the economy stating that the good thing is that the Central Bank of Nigeria (CBN ) is now encouraging banks to start borrowing again. If things look better we are looking at next year for the Bitumen project.