In a significant step to enhance the availability and investment in Compressed Natural Gas (CNG) infrastructure, the Presidential Compressed Natural Gas Initiative (P-CNGi) and LNG Arete Ltd. signed a Memorandum of Understanding (MoU) for a $27.3 million gas plant project aimed at accelerating CNG development across Nigeria.
The Program Director/CEO of P-CNGi, Mr. Michael Oluwagbemi, highlighted that the partnership’s main objective is to build a Liquefied Natural Gas (LNG) plant with a processing capacity of seven million standard cubic feet per day (MMSCFD). The investment is split between P-CNGi, which is contributing $6 million, and LNG Arete, which is investing $12 million, with additional support from the Midstream Downstream Gas Infrastructure Fund under the oversight of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Oluwagbemi further emphasized that the project would create over 100 jobs for Nigerians and provide a major boost to CNG infrastructure development in Northern Nigeria. The partnership also secures a 25% equity stake in LNG Arete’s mini LNG facility located in Ajaokuta, Kogi State.
Expected to become operational within 12 to 16 months, the project will create a crucial CNG supply hub that will serve Northern Nigeria and beyond, addressing the region’s unmet demand for cost-effective and reliable CNG. This development is a direct response to the region’s underserved energy needs, especially for industrial and residential users.
Oluwagbemi noted the increasing demand for gas to fuel transportation and industrialization, stating that the initiative is part of the President’s broader commitment to making affordable transportation programs a reality through leveraging Nigeria’s abundant gas resources. He added, “Gas is cheaper, safer, and more reliable,” underscoring the ongoing efforts to move gas from the southern part of the country to the rest of Nigeria.
The Ajaokuta-Kaduna-Kano (AKK) gas pipeline, spearheaded by the Nigerian National Petroleum Corporation (NNPC) and its partners, is central to the project’s logistics. The gas will be liquefied at the Ajaokuta facility, stored, and transported using a network of trucks that can deliver gas across Northern Nigeria. This infrastructure will also facilitate the creation of LNG-powered trucks, which are expected to move Nigerian products to international markets such as Ghana and Senegal, making Nigerian goods more competitive globally.
In addition to benefiting industries across sectors such as textile, agriculture, and manufacturing, the project will also reduce transportation costs within Nigeria. The logistical movement of processed and manufactured goods from the north to the south will become more efficient and affordable, further spurring industrial growth.
Moreover, even when Northern Nigeria is eventually piped with natural gas, the LNG plant will remain crucial for the continued operation of LNG-powered trucks, which offer enhanced fuel efficiency compared to traditional CNG vehicles.
Speaking at the event, Hajara Pitan, Project Director at LNG Arete, expressed her gratitude to President Bola Tinubu, the P-CNGi team, and all stakeholders who helped bring the project to fruition. She highlighted the significant challenge of infrastructure costs in the gas sector but emphasized that mini LNG technology enables greater participation from Nigerians in the gas industry.
“We aim to support the Federal Government in expanding gas utilization across Nigeria, especially in underserved regions like Northern Nigeria,” Pitan explained. She further elaborated, “LNG, or liquefied natural gas, allows us to reduce the volume of gas, making it easier to transport and distribute to more areas, even where pipelines are not feasible.”