P-CNGI, Firm sign $27.3m deal to boost CNG penetration

The Presidential Compressed Natural Gas Initiative (PCNGI) yesterday signed a Memorandum of Understanding (MoU) with LNG Arete Limited, an indigenous company, for the construction of a $27.3 million Liquefied Natural Gas (LNG) plant in Ajaokuta, North-central Nigeria. Daily Trust understands that the facility would have a processing capacity of 7 million Standard Cubic Feet Per […]

The Presidential Compressed Natural Gas Initiative (PCNGI) yesterday signed a Memorandum of Understanding (MoU) with LNG Arete Limited, an indigenous company, for the construction of a $27.3 million Liquefied Natural Gas (LNG) plant in Ajaokuta, North-central Nigeria.

Daily Trust understands that the facility would have a processing capacity of 7 million Standard Cubic Feet Per Day (MMSCFD) and will primarily serve Northern Nigeria and by extension the entire country.

Speaking in Abuja at the signing ceremony, a breakdown by the Chief Executive of the PCNGI, Michael Oluwagbemi, showed that LNG Arete would provide about $12 million of the funding as equity, while PCNGI is expected to contribute about $6 million equity.

In addition, the remaining amount will be sourced from other identified investors.

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“To achieve this, it’s very important that we provide the raw material, which is gas, which this country has in abundance to the end-user. Currently, Nigeria’s gas resources far outstrip what we have in oil, but the constraint has always been how do we not just produce it, how do we distribute it and how do we get it to the final user in various forms,” Oluwagbemi stated.

Stressing that Nigeria has no business being solely dependent on oil, with gas being cheaper, safer and more reliable, Oluwagbemi stated that there has been increasing demand to be able to access gas to enable transportation and other sectors.

The PCNGI CEO stated that the project would be completed between 12 to 16 months, explaining that when completed, it will help unlock gas resources to the north and democratise access to gas resources across Nigeria.

“So this is about industrialisation in the first instance. Many industries across the north, from textile to agriculture to processing to manufacturing, will benefit hugely from this project. The logistics of moving goods from the north down to the south, food items especially, processed and manufactured products will also be cheaper because of this project.

“And even more importantly, is that even when the north gets piped natural gas in a few years’ time, this plant is still going to be very critical to enable LNG trucks that run more efficiently on LNG, even better than CNG,” Oluwagbemi noted.