In a bid to expand Nigeria’s natural gas infrastructure, the Presidential Compressed Natural Gas Initiative (P-CNGi) and LNG Arete Ltd. have entered into a Memorandum of Understanding (MoU) to develop a $27.3 million gas plant. This collaboration seeks to enhance the availability and investment in Compressed Natural Gas (CNG) infrastructure across the country, focusing particularly on Northern Nigeria.
The initiative will involve the construction of a Liquefied Natural Gas (LNG) plant with a processing capacity of seven million standard cubic feet per day (MMSCFD). Michael Oluwagbemi, the CEO and Programme Director of P-CNGi, emphasized that the project is a step forward in advancing Nigeria’s gas infrastructure, with the P-CNGi contributing $6 million and LNG Arete Ltd. providing $12 million in funding. The Midstream Downstream Gas Infrastructure Fund, managed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), is also co-investing in the project.
Highlighting the potential impact, Oluwagbemi noted that the development will create over 100 jobs for Nigerians and will play a key role in the region’s CNG infrastructure growth. The plant will serve as a critical supply hub for CNG in Northern Nigeria, a region currently underserved in terms of gas availability. With an expected operational timeline of 12 to 16 months, the facility is poised to address the growing demand for CNG among both residential and industrial users in the region.
Mr. Oluwagbemi further explained that the plant’s contribution goes beyond regional development. The project forms part of the federal government’s broader strategy to ensure the consistent and affordable availability of natural gas throughout Nigeria. President Bola Tinubu’s administration, along with previous leadership, has committed to facilitating the movement of gas from southern Nigeria, where it is primarily produced, to the rest of the country. The establishment of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline, supported by the Nigerian National Petroleum Company Limited (NNPC Ltd.), is central to this initiative.
Located in Ajaokuta, Kogi State, the LNG liquefaction plant will enable the transportation of gas over long distances through pipeline trucks, thus establishing a robust supply network across Northern Nigeria. This will not only meet local industrial and transportation needs but also create an export pathway for Nigerian products to international markets, further enhancing the country’s competitiveness.
Additionally, the LNG converted to CNG will be used in various sectors, including power generation, transportation, and manufacturing, which will significantly boost industrialization in the region. Mr. Oluwagbemi pointed out that the textile, agriculture, and manufacturing industries in Northern Nigeria would benefit immensely from this development. Furthermore, the initiative will reduce logistics costs for transporting goods from the north to the south, especially processed goods, making Nigerian products more cost-competitive on the global stage.
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LNG Arete’s Project Director, Hajara Pitan, also expressed her appreciation for the partnership, acknowledging the challenges that have historically hindered the development of the gas sector, particularly due to the high infrastructure costs. She commended the mini LNG technology that will enable Nigeria to play a more significant role in the global gas market. “Our goal at LNG Arete is to support the federal government in expanding gas usage, particularly in regions like Northern Nigeria that have long been underserved,” Pitan stated. “By liquefying natural gas, we can make it easier to transport and distribute, helping to meet Nigeria’s energy needs more efficiently.”
This joint venture stands as a testament to Nigeria’s commitment to advancing its energy sector, improving industrialization, and creating new opportunities for job growth and economic development. Through strategic investments in infrastructure, this project will not only meet local demands but also position Nigeria as a competitive force in the international energy market.
